Amid concerns over economic growth and depreciating rupee, overseas investors pulled out Rs 1,957 crore from equities in April—June this year in contrast to a hefty Rs 44,000 crore investment in stocks in the previous quarter.

According to the data available with market regulator Sebi, foreign institutional investors (FIIs) have withdrawn a total of Rs 1,957 crore in April—June quarter of current fiscal. This was against record net inflows of Rs 43,951 crore in the January—March quarter.

In April—June period of 2011, FIIs investment in the equity market stood at Rs 5,171 crore.

Market experts attributed the outflow to a slew of reasons including depreciating rupee, slowing economic growth, high fiscal and current account deficit.

“Foreign investors are staying away from the Indian equity market due to weakness in rupee, which fell to a record low of 57.37 to the US dollar last month,” a stock broker said.

The country’s GDP growth had dropped to nine year low of 6.5 per cent in 2011—12. The growth in the January—March quarter was only 5.3 per cent. The Index of Industrial Production) data showed just 0.1 per cent growth in April.

Of the total withdrawal of Rs 1,957 crore in April—June, FIIs took out Rs 501 crore in June, Rs 347 crore in May and 1,109 crore in April.

In terms of debt, FIIs infused Rs 1,463 crore in the June quarter as against Rs 19,398 in the March quarter.

After taking the latest withdrawals into account, FIIs have made an investment of Rs 41,993 crore into the equity market so far this year and Rs 20,861 crore into the debt market during the same period.

The BSE 30 scrip barometer Sensex has gained 0.15 per cent this April—June period to close at 17,430 points on June 29.

Although, the number of registered FIIs in the country were 1,758 at the end of June quarter as compared to 1,765 in March quarter. Besides, total number of sub accounts stood at 6,336 in April—June period of 2012 as against 6,322 in the preceding quarter.

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