Foreign institutional investors (FIIs), who had turned away from the Indian equity market last year, seem to be returning back. Since the beginning of the new financial year 2009-10, they have already put in over Rs 1,000 crore into the domestic stocks.
FIIs seem to have embarked on a fresh buying mode and made net investments of Rs 1,056.1 crore since April 1, the latest data available with the market regulator Securities and Exchange Board of India (Sebi) website shows. Significantly, in the last financial year, FIIs had pulled out close to Rs 50,000 crore at the domestic stock market, almost equalling the inflow in the previous financial year.
According to Sebi data, FIIs' net outflows have been Rs 47,706.2 crore till March 30 in the financial year 2008-09 as against huge inflows of Rs 53,000 crore in FY'08.
Further, the Bombay Stock Exchange's benchmark index Sensex has witnessed a rally in the past two weeks although there have been just five trading sessions due to holidays in between. Since the beginning of the new financial year, Sensex has gained over 900 points or over 9 per cent. On Thursday, the last trading day of the week, Sensex closed at 10,803.86 points.
Besides, FIIs have also made net investments in the debt segment to the tune of Rs 620 crore in the first five days of the FY10.
Interestingly, it seems that the domestic mutual funds are still concerned about the movement of the equity market as they have invested just about Rs 38.3 crore in this financial year, the latest data available with Sebi shows. However, the fund houses have put in a significantly larger amount in the debt segment in the first few days of the financial year.They have made investments of nearly Rs 9,000 crore in the debt segment in April so far, the latest data shows.
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Since the beginning of 2009, the domestic institutional investors (which include mutual fund houses, insurance firms and others) have made a net investment of Rs 10,558.98 crore in shares, the latest provisional data with the BSE shows.
In the financial year 2008-09, the country's mutual fund industry witnessed a decline of nearly Rs 37,000 crore in its assets, with the top fund house Reliance MF accounting for a little less than one-third of the losses.