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Overseas investors invested Rs 6,460 crore ($1.45 billion) in the domestic stock market in just five trading sessions of July and analysts feel the positive trend will continue in the coming months as well.
Foreign Institutional Investors (FIIs) purchased equities and debt securities worth a gross amount of Rs 26,004 crore so far this month.
However, they also sold shares and bonds worth Rs 19,544.3 crore during the period, resulting into a net investment of Rs 6,460 crore, according to the information available with the Securities and Exchange Board of India.
Market experts said investors were coming back due to decline in inflation and crude oil prices.
“Situation has been improving in the last few trading sessions as investors are again coming back to equity market due to cooling inflation and decline in crude oil prices,” CNI Research Head Mr Kishor Ostwal said.
Investors had shunned emerging markets such as India in the first half of this year as these countries battled inflation. Besides, high interest rate was also considered as a risk to these countries.
FIIs were interested in the debt market in the first six months of the year, making a net investment of Rs 9,948 crore while their investments in stocks stood at Rs 2,670 crore.
Analysts believe that FIIs will bring more money in the coming six months.
“In the long-term, FIIs will remain bullish on the Indian market. Moreover, in the next six months market will witness more inflows than the last six months,” Geojit BNP Paribas Research Head Mr Alex Mathews said.
In 2010, foreign investors purchased stocks and bonds worth Rs 10 lakh crore, a record high for a year. During the same period, FIIs sold shares and bonds worth Rs 7,80,000 crore, which translated into a record net investment of over Rs 1.75 lakh crore.
The number of FIIs registered with SEBI marginally rose from 1,718 as on December 31, 2010, to 1,730 as of July this year. Besides, the number of registered sub-accounts has climbed from 5,503 in December 31, 2010 to 5,898.
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