International investors pump in ₹20,077 cr so far this month

The celebration in the capital market seems to continue with about 161 stocks registering new 52-week highs on Friday. Of these, 38 stocks have hit all-time highs.

The prominent stocks that hit 52-week highs include Hero MotoCorp (₹2,260), ACC (₹1,346.8), Adani Enterprises (₹338.25), Siemens (₹735) and Hindalco Industries (₹130).

Some of the stocks that have hit an all-time highs were Atul Auto (₹370), BASF India (₹862), UltraTech Cement (₹2154), Shree Cement (₹5,675), Aditya Birla Chemicals (₹177), FAG Bearings (₹1,910), Bajaj Finance (₹1,822.6) and Kaveri Seed (₹646.95).

The benchmark S&P BSE Sensex has been scaling new highs in the last one week on huge inflows from foreign institutional investors. Despite weak macro economic conditions, market sentiment has turned bullish with the expectation of a stable Government taking charge at the Centre after general election.

Except for a positive turn in the current account deficit, the macro economic situation appears to be bleak with high inflation, low industrial production and huge fiscal deficit. Growth in the country’s gross domestic product for the quarter ended December 2013 was a modest 4.7 per cent, which was a tad lower than the second quarter’s 4.8 per cent. It was the seventh straight quarter when it grew at a sub-5 per cent level.

The market rally was largely driven by foreign institutional investors who pumped in a whopping ₹20,077 crore in March, with ₹2,257 crore invested on Friday.

Paras Bothra, Vice-President (Equity), Ashika Stock Broking, said the fillip in foreign institution investors’ confidence in the Indian market is because they expect the green shoots in industrial production to revive overall economic growth in the country.

“Foreign investors expect the economy to turn better six months down the line, with a favourable Government in place. Despite the markets hitting a new high, there are many stocks in sectors such as capital goods, manufacturing, public sector banks and PSU stocks with attractive valuations,” he said.

Vikram Dhawan, Director, Equentis Capital, said investors with a six- to 12-month horizon would do well to book profits if their stocks have hit a high, as the market rally from hereon looks limited. “Foreign investors would start focusing on fourth quarter corporate financial results that should start trickling in from early next month. Despite moderation in inflation and stable currency, concern in some sectors such as infrastructure, realty and banking still remains,” he said.

(This article was published on March 28, 2014)
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