Overseas investors bought a net Rs 2,190 crore ($444.1 million) of Indian equities on February 15 and 16, raising their investment in equities this year to Rs 24,220 crore, according to the nation’s market regulator.
Foreigners bought shares worth Rs 7,870 crore and sold Rs 5,680 crore over the two days, the Securities & Exchange Board of India (Sebi) said on its website on Friday. They sold a net Rs 6,870 crore of bonds in the period, paring their inflow into debt this year to Rs 16,770 crore, the data showed.
The flows helped the Sensex post its best January gain since 1994 and fuelled the rupee’s record monthly advance. They had invested Rs 42,100 crore in bonds last year.
Foreigners have invested Rs 4.686 lakh crore in stocks and Rs 1.375 lakh crore in bonds, since they were allowed into the country in 1993. Investments in debt increased after Prime Minister Manmohan Singh’s government raised the cap on foreign ownership of local currency bonds by 20 per cent to $60 billion in November to stem a slide in the rupee. The currency tumbled 16 per cent in 2011, Asia’s worst performer.
India’s $1.2-trillion stock market, Asia’s fifth-biggest, is influenced by flows from overseas. Inflows from abroad surged to a record in 2010, making India the best performer among the world’s top 10 markets. The largest-ever outflow in 2008 led to the biggest annual slump of 52 per cent.
Offshore funds pulled out Rs 2,710 crore from local equities last year, compared with record flows of Rs 1.33 lakh crore in 2010, as Europe’s debt crisis threatened the global economy and cooled demand for emerging-market assets. That led to a 25 per cent drop in the Sensex, the second-worst annual loss, and sent the rupee to an all-time low.
The regulator provides data on shares bought and sold by large investors, including trades in the primary and secondary markets, with a delay of at least a day.