FII net-selling crosses $1-bn since last Fed meet

FOMC has announced that QE3 will end after the October tranch of $ 15 billion

Foreign institutional selling has crossed the $1 billion threshold since the last US Federal Reserve meet heightening concerns about further outflows from the Indian markets. In rupee terms, foreign institutional investors (FIIs) have net-sold Rs 7,482 crore, including provisional data from the exchanges for Friday.

During the two-day meeting of the Federal Open Market Committee (FOMC) last month (September 16-17) it announced that the American central bank's monthly bond-buying programme - quantitative easing 3 (QE3) - would end in October. The last tranch of the QE3 stands at $15 billion.

Analysts said that money was fleeing to the US markets on concerns about slowing growth in the European and Asian economies.

On Friday, FIIs sold equities worth Rs 1,430 crore on Friday even as the benchmark indices closed up about 0.5 per cent.

The BSE Sensex ended a volatile market session, led by fall in the technology sector stocks, at 26,108 while the NSE Nifty closed at 7,779.

"The recent weakness in the market that we have seen has been due to the sell-off in the global markets. Hedge funds have been selling across regions making foreign investors net-sellers in this market. But the good thing is that the Indian domestic institutions are turning investors," said Nirmal Rungta, director and head - private client group, CIMB Securities.

Interestingly, while foreign institutional investors were net-sellers of equities, domestic institutional investors (DIIs) have been buying heavily into Indian equities. DIIs have been net-buyers of equities at Rs 8,350 crore in the last one-month period.