FII flows unlikely to dry up

With stock markets touching new milestones every few sessions, the inflow of funds from foreign institutional investors (FIIs) is unlikely to take a u-turn, global rating agency Standard and Poor's said on Wednesday.

"The current macroeconomic scenario is sustainable and the likelihood of a reversal (of capital flows) is very low and at this point almost non-existent," S&P Chief Economist (Asia- Pacific) Subir Gokarn said in a tele-conference.

FIIs have pumped over Rs 60,000 crore into the country's equity markets so far this year.

The benchmark Sensex has zoomed past the 18,000-point mark from 16,000 points merely 14 sessions ago. Nifty has also reached 5,400.

"If you look at the composition of the flows, it has changed from pure portfolio to strategic long-term investments. The trend is towards more permanence, commitment and optimism," he added.

The Sensex crossed 16,000 on September 19 after the overnight Fed rate cut, raced past 17,000 on September 26 in just six days, while in the next eight sessions it attained 18,000 points.

In its mid-year review, S&P had forecast a slowdown in domestic growth to 8.6 per cent due to the high interest rates and appreciating rupee.