FIIs back in action, snap up Rs 1,237cr equities

In June, FII bought shares worth Rs 754cr while in May they sold stocks worth Rs 1,291cr.

After a gap of two months, foreign institutional investors (FIIs) are back in action, with net purchases of over Rs 1,237 crore worth of shares in the seven trading sessions beginning May 30.

In the five trading days of June alone, the net FII purchase was to the tune of Rs 754 crore.

This is good news for the Indian stock market as FIIs were net sellers to the tune of Rs 2,150 crore in two successive months, April and May.

In April, FIIs sold shares to the tune of Rs 1,047 crore (net) and in May (till May 29), they sold shares worth Rs 1,291.40 crore. (If one includes the last two trading days of May, then the net FII selling last month was Rs 807.60 crore.)

"The biggest trigger was the financial performance of India Inc. The FII money is bound to flow when the corporate sector's bottom line grows by over 50 per cent," said a fund manager.

Devesh Kumar, head of equity, ICICI Securities, said the emerging markets had witnessed some sort of resurgence, with money flowing back into these markets, including India.

"The risk of higher oil prices and rising dollar has lowered, to an extent, the confidence in emerging markets," he pointed out.

While FIIs were net buyers in cash markets, local mutual funds, which purchased shares worth Rs 4,780 crore in April and May, were net sellers in June. Domestic funds were net sellers to the tune of Rs 195 crore.

According to the data available with the Securities and Exchange Board of India (Sebi), FIIs bought shares worth Rs 4,716 crore and sold Rs 3,479 crore worth of shares, making net purchases of Rs 1,237 in seven trading days from May 31 to June 6.

The Bombay Stock Exchange (BSE) Sensex during the period gained 94.64 points "" from 6663.55 on May 30 to 6,758.18 on June 6.