Foreign institutional investors' inflow into Indian stocks reach $4bn

NEW DELHI: Adopting a bullish stance on India, overseas investors have pumped in about Rs 14,000 crore in the Indian equity market so far this month and the experts expect this positive trend to continue further.

Since the beginning of 2012, the FIIs have infused a total of Rs 24,225 crore ($4 billion) into Indian stocks, after taking into account Rs 10,358 crore of net inflow during January 2012.

During February 1-17, 2012, foreign institutional investors (FIIs) were gross buyers of shares worth Rs 47,895 crore, while they sold equities amounting to Rs 34,028 crore, translating into a net investment of Rs 13,867 crore ($2.81 billion), as per data available with market regulator Sebi.

Market analysts attributed strong FIIs inflow in the domestic market to the reversal in RBI's monetary policy and the subsequent impact of improved liquidity position.

The foreign fund houses have also infused Rs 799 crore in the debt market so far this month. This takes the overall net investments by FIIs into Indian markets to Rs 14,666 crore ($2.97 billion) for this period.

Stock market inflows in the first 17 days of February, at Rs 13,867 crore, were higher than that for the entire month of January 2012, which stood at Rs 10,358 crore.

"FIIs have been infusing money into the Indian market due to change in RBI's monetary policy that have added liquidity to the system. This liquidity will help in growth of the country," Wellindia executive director Hemant Mamtani said.

"Indian market will continue to witness inflows in the whole year," he added.

Strong surge in FII inflows in 2012 so far has helped boost the equity markets as well as helped the Indian rupee to strengthen.

The stock market barometer sensex gained 6.37 per cent or 1096 points in February. The index finished at 18,289.35 on February 17, the last trading session of the month, gaining 135 points from its last close.

It is not only India which has witnessed an upsurge in investment, equity funds focused on all emerging markets put together have seen an inflow of over $19 billion in 2012.

"In 2012, FIIs infused money into the Indian market mainly on account of easing inflation, a relaxing of foreign investor restrictions and the RBI's policy moves," CNI Research Head Kishor Ostwal said.

FIIs had mostly stayed away from Indian equities in 2011. They flocked toward the debt market in 2011 with a net investment of Rs 20,293 crore, while pulling out Rs 2,812 crore from equities.