FII net inflow in equities crosses $2 b

An analysis of the net FII fund flow into the domestic equities shows that overseas investors have parked a hefty $2.02 billion (Rs 9,189 crore) in the domestic stocks as on March 9.

As per the latest data available with the capital market regulator Sebi, foreign institutional investors have been gross purchasers of equities worth Rs 1,20,128 crore so far this year, while they sold stocks valued at Rs 1,10,938.7 crore, resulting in a net inflow of Rs 9,189.60 crore. Marketmen said the positive aspects of the budget 2011 helped to woo foreign fund into the domestic bourses.

Boosted sentiment

“The budget has all positive points that investors were looking for and it boosted the sentiment. FII inflow is also a positive impact of the budget,” Bonanza Portfolio Assistant Vice-President for equity research Avinash Gupta said.

“In the coming days too, the domestic market will witness good inflow from FIIs,” he added.

Interestingly, on Wednesday, the FIIs were the net buyers of shares worth Rs 364.36 crore, according to the provisional BSE data. In February, foreign funds invested Rs 1,216 crore in the domestic equities, reversing their pull-out trend of the first month of the year.

In January, FIIs withdrew a net Rs 500.3 crore from the markets, turning net sellers for the first time since February 2008. Till mid-February this year, FIIs were net sellers.

Favourite bet

After a lull in 2008, the domestic markets once again became the favourite bet for foreign funds last year as their net exposure in the domestic bourses stood at nearly Rs 88,000 crore in 2009.

Last year’s investment of Rs 87,987 crore by FIIs was the highest ever inflow into the country in rupee terms in a single year.

Buoyed by FII inflow during last year, the Sensex gained over 80 per cent and was one of the best performers among the leading global bourses.