FII, mutual fund buying takes Indian stock markets close to new highs

Analysts say a rate in the dividend distribution tax and buyback tax could fuel further buying by FIIs

The Indian markets are staring at fresh all-time highs, even as foreign and domestic investors have joined forces, following the surprise rate-cut announcement by the government last month. The benchmark Sensex and Nifty had gained more than 10 per cent since September 19, when they had ended at seven-month lows.

During this period, foreign institutional investors (FIIs) have pumped in nearly Rs 17,000 crore, while mutual funds (MFs) have been net buyers to the tune of Rs 9,000 crore. Currently, the Sensex is only 1 per cent away from its record high of 40,268 made in early June. Another 2