Overseas investors have made net investments of $1.2 billion in the Indian equity market during the first week of the month, taking the total for 2012 so far to a whopping $21 billion.

During December 3-7, Foreign Institutional Investors (FIIs) were gross buyers of shares worth Rs 20,314 crore and sellers of equities worth Rs 14,167 crore - translating into a net inflow of Rs 6,147 crore ($1.2 billion), according to SEBI data.

This takes the net investment by FIIs to $20.9 billion so far in 2012, making it as the second highest net inflow by in a single calendar year since their entry into Indian capital markets in 1992.

In 2010, overseas investors had made net investments of about $29 billion (about Rs 1,33,266 crore). FIIs had pulled out $358 million (Rs 2,714 crore) in 2011.

Foreign investors have been betting big on Indian equities in the last few months on the back of a slew of economic reforms initiated by government, pushing up BSE benchmark Sensex by about 25 per cent in 2012 calendar year.

“FIIs continued with the positive bias towards Indian equities as the lack of investment options make the country an attractive destination. India is still considered as a better market compared to other markets in Asia or emerging markets,” Sudip Bandyopadhyay, MD & CEO, Destimoney Securities said.

Kishor Ostwal CMD at CNI Research said, “India has had an excellent year so far after a disastrous 2011. I think Indian valuations look cheaper compared to historical average.”

However, overseas investors have pulled out a net Rs 2,129 crore ($390 million)in the debt market so far this month. In 2012, FIIs total investment into the debt market stood at Rs 31,155 crore ($5.93 billion).

Besides, the number of registered FIIs in the country stood at 1,749 till December 7, while the total number of sub-accounts was at 6,306.

(This article was published on December 9, 2012)
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