Foreign institutional investors (FIIs) could be pulling out of the Indian markets. At least four funds are believed to be unwinding their equity positions: Capital International, Janus Corporation, Schroders and Morgan Stanley. Executives at none of the four was available for comment over the weekend, but reliable market sources suggest that they have embarked upon a major bout of selling over the last few days.
If the wave of selling continues for a few more sessions, the sensex may fall below the 2,500 mark in the absence of a strong counterbalancing force like the Unit Trust of India (UTI) in the market.