Foreign institutional investors (FII) inflow into the Indian stock markets has crossed the $3 billion-mark (over Rs 15,725 crore) so far this year, with as much as $2 billion coming in just five trading sessions.
As per the latest data available with the Securities and Exchange Board of India (Sebi), FIIs made net purchases worth $3.2 billion or over Rs 15,725 crore so far in 2009, with the stock market seeing major investments in the past three weeks. On Tuesday alone, FIIs put in as much as Rs 5,044.8 crore ($1.06 billion) in the domestic share markets, the Sebi data shows.
"Since several past weeks, overseas fund houses are making investments in the many emerging markets and India is the part of that investment," brokerage firm Sharekhan's Research Head Gaurav Dua said from Mumbai.
Since last week, FII inflows increased significantly with net investments of Rs 4,085 crore on May 14, followed by 1,000 crore on May 18, Rs 53 crore on May 19 and again a huge Rs 5,044 crore on May 20.
However, during the period, the markets also witnessed sale of shares worth Rs 345 crore by the overseas investors, the Sebi data shows. Since the beginning of new fiscal year, FIIs have started putting money in domestic stocks, including blue-chips.
In May alone, FIIs made gross purchases of equities worth Rs 44,705.2 crore and sold shares of Rs 29,336.1 crore, resulting in a net investment of Rs 15,368.80 crore ($3.1 billion).
After pulling out a hefty Rs 52,987 crore from the Indian stock markets in 2008, which saw the Bombay Stock Exchange benchmark Sensex plunging 51 per cent, FIIs have turned net buyers during the last week of April. The Sensex has gained over 45 per cent so far this year to touch 14,302 points, the highest level in the past seven months.
A day after the Sonia Gandhi-led Congress party emerged as the single largest political party in the Lok Sabha, the benchmark index of the BSE witnessed the highest ever single-day gain of nearly 2,100 points to cross the 14,000 level on May 18, also the first time in 2009.
On the same day, trading was halted at the BSE and NSE twice as, for the first time in the history of the Indian stock markets, the benchmark indices hit the upper circuit, that too within some seconds of trade.
Further, the country's leading bourse, National Stock Exchange, witnessed the highest-ever trading volume in a single day, while the number of trades crossed the one-crore mark. The number of trades at the NSE witnessed a record 1.12 crore trades, data available on the NSE shows. Moreover, it saw a record daily turnover in terms of value at Rs 40,151.91 crore and a record traded quantity of 19,225 lakh shares.
The BSE’s Sensex had scaled a high of 21,206.77 points in January last year, but dipped to a low of 7,697.39 points in October. It had closed the trade at 9,647.31 points in 2008.
Indicating a revival in the stock market, the flight of FIIs back to the Indian markets saw an infusion of Rs 6,508 crore in the capital market in April alone, the highest monthly infusion so far this year.
An analysis of the data of foreign investment showed that the confidence of FIIs in Indian equities has started to build in the month of March as they bought equities worth Rs 530 crore.
