Trading by foreign funds at an all-time high in first 2-1/2 months of 2003-04
Trading by foreign institutional investors (FIIs) on the Indian markets touched an all-time high during the first two-and-a-half months of 2003-04.
Between April 1, 2003, and June 16, the gross turnover of FII trades aggregated Rs 24,083 crore, amounting to nearly 13 per cent of the combined turnover of the Bombay Stock Exchange (BSE) and the National Stock Exchange (NSE).
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FII purchases during the period were at Rs 13,429 crore and sales were at Rs 10,655 crore, accounting for 12.93 per cent of the combined turnover on the BSE and NSE.
This was the highest-ever gross trading volume in percentage terms by FIIs ever since they were allowed into the equity markets in 1994.
However, during fiscal 2001-02, FIIs were aggressive buyers when their share in the total turnover aggregated 10.3 per cent.
The bullish tone in FII activities was first noticed in April 2003 when their gross turnover touched a 25-month high of Rs 9,842 crore, accounting for 14.1 per cent of the turnover on BSE and NSE.
This, in fact, was the highest ever share of the FIIs in total trading, beating the previous high of 13.2 per cent in April 2000.
The double-digit share continued in May with FIIs clocking gross volumes of Rs 9,714 crore, accounting for 12.6 per cent of the total turnover. During the 10 trading days of June, FIIs gross turnover accounted for 11.5 per cent.
The FII activities came as a manna from heaven in the Indian equity markets. The BSE Sensex which had declined to a six-month low of 2924 on April 25, perked up and has already gained over 16 per cent from this low point.
The major trigger came from the net FII buying which has already crossed the net buying achieved in 2002-03.
During the two-and-a-half months of the current fiscal year, FII net purchases were at Rs 2,774 crore compared with net purchases of Rs 2,464 crore in fiscal 2002-03.
Interestingly, FIIs have been net purchasers in the domestic equity markets for seven months in a row.
From nervous sellers during the first half of 2002-03, FIIs started buying aggressively after the central government passed the securitisation bill in November 2002.
FIIs were net buyers of equity to the tune of Rs 469 crore in November. In December 2002, FIIs