Mirroring their strong confidence in Indian stocks, overseas investors have pumped $17.46 billion (Rs 80,236 crore) into local shares in just nine months, surpassing the total foreign fund inflows in 2009.
Foreign institutional investors (FIIs) made a net buy of shares worth $17.46 billion so far in 2010, just shy of the record inflows of $17.65 billion came in domestic equities during the year 2007.
As per the data available with capital market regulator Securities and Exchange Board of India, foreign institutional investors (FIIs) have made a net buy of shares worth $17.46 billion so far in 2010 and equity analysts believe it will go up further in the coming days.
"The pace at which FIIs are pumping money into India, it will be not a surprise that the investment will surpass the record level in few coming days," a broker said.
The record investment of 2007 was in dollar terms and in rupee terms the highest ever inflows from overseas fund houses was made in year 2009.
Last year, FIIs were the net purchaser of shares worth Rs 83,423 core ($17.45 billion), the highest ever in the Indian equity market. During the same year, the stock market benchmark Sensex had recorded a gain of over 80 per cent.
However, in rupee terms, current year's FII inflow is Rs 80,236.90, about Rs 3,187 crore less than last year's record inflows.
The low interest rate regime followed in many advanced economies to avert recession, coupled with better economic performance of emerging markets such as India and China, are keys to attract a chunk of foreign inflows, analysts said.
"FIIs continue to pour money into Indian financial assets amid bright prospects for economic growth and corporate earnings," India Infoline Vice President (Research) Amar Ambani said.
On the back of huge inflows from FIIs, Sensex had been on a rising-spree in recent sessions. It regained the magical level of 20,000 points two days back after a gap of 32 months.
With such huge inflows from FIIs, marketmen believe the Sensex could reach its record high-level of 21,200 easily in coming period. The Sensex had hit its lifetime high of 21,206 on January 10, 2008.
FIIs play a significant role in domestic equity markets and their movement (inflow and outflow) causes fluctuation in benchmark indices.
