FII inflows into Indian stocks reach $4 b for 2012

Adopting a bullish stance on India, overseas investors have pumped in about Rs 14,000 crore in the Indian equity market so far this month and experts expect this positive trend to continue.

Since the beginning of 2012, foreign institutional investors (FIIs) have infused a total of Rs 24,225 crore ($4 billion) into Indian stocks, after taking into account Rs 10,358 crore of net inflow during January 2012.

During February 1-17, 2012, FIIs were gross buyers of shares worth Rs 47,895 crore, while they sold equities amounting to Rs 34,028 crore, translating into a net investment of Rs 13,867 crore ($2.81 billion), as per data available with market regulator Sebi.

Market analysts attributed strong FIIs’ inflow to the reversal in RBI’s monetary policy and subsequent impact of improved liquidity position.

The foreign fund houses have also infused Rs 799 crore in the debt market so far this month. This takes the overall net investments by FIIs into Indian markets to Rs 14,666 crore ($2.97 billion) for this period. Stock market inflows in the first 17 days of February, at Rs 13,867 crore, were higher than that for the entire month of January 2012, which stood at Rs 10,358 crore.

It is not only India which has witnessed an upsurge in investment, equity funds focused on all emerging markets put together have seen an inflow of over $19 billion in 2012. FIIs had mostly stayed away from Indian equities in 2011. They flocked toward the debt market in 2011 with a net investment of Rs 20,293 crore, while pulling out Rs 2,812 crore from equities.