Foreign funds pulled out nearly Rs 2,000 crore from the Indian stock and debt market in September, the second consecutive month in which overseas capital outflows were greater than inflows.
According to data available with the Securities and Exchange Board of India (SEBI), overseas investors purchased equity and debt securities worth a gross amount of Rs 64,868 crore in September.
At the same time, Foreign Institutional Investors (FIIs) sold securities worth Rs 66,734 crore during the month. This translated into a net outflow of Rs 1,866 crore during the period.
This was the second consecutive month in which there was a net outflow of FII money from the country. Last month, foreign funds pulled out nearly Rs 8,000 crore, or $1.8 billion, from the Indian stock and debt market - the highest monthly withdrawal since October, 2008. In October, 2008, foreign fund houses were net sellers of equities and debt worth Rs 13,489 crore.
Market analysts believe the heavy selling by FIIs was triggered by ongoing debt crisis in the euro zone and weakness in the US economy.
The heavy selling by FIIs was the main reason for the BSE benchmark Sensex losing 368 points, or 2 per cent, in September.
FIIs withdrew money from both the equity and debt market. They pulled out more capital from the debt market than equities during the period under review.
Foreign fund houses pulled out Rs 158 crore from the stock market and Rs 1,707 crore from the debt market during September, 2011, SEBI said.
So far this year, FIIs have pumped Rs 17,664.60 crore into the stock and bond markets, compared to about Rs 1,79,674 crore in the whole of 2010.
The number of FIIs registered with SEBI stood at 1,745 as of September this year.