New Delhi: Foreign funds to the tune of $2.7 billion were pulled out of the domestic bourses over the last 18 sessions and analysts believe the trend would continue till the Union Budget.
“There will be no major FII buying activity in the market till the Union Budget on 26 February. After reviewing how the government looks at exiting the stimulus package and as well manage growth, the funds will churn their portfolio,” CNI Research’s CMD Kishor P Ostwal said.
Over the 18 trading sessions in the last four weeks, the foreign institutional investors (FIIs) pulled out $ 2.7 billion (Rs12,494 crore) from the Indian stocks, the data with the market regulator Securities and Exchange Board of India (Sebi) reveals.
The Bombay Stock Exchange benchmark Sensex is down 7.5% cent in 2010 to 16,152.59 points as the reverse flight of foreign funds from Indian stock markets continued unabated since mid-January of this year.
In 2009, the index had risen 81% on foreign inflows of $ 17.5 billion.
Analysts believe with the firming global markets and the Dow Jones Industrial Average closed above the 10,000-level on Friday, FIIs might shift their focus here for some time.
SMC global vice-president Rajesh Jain said, “As the US and European market stabilises, going ahead we will see FIIs returning to India. Till the budget, the FIIs will stay away from making fresh investments and there may be some minor positive activity.”
During January, overseas investors were gross sellers of equities worth Rs58,630.60 crore, while they bought shares worth Rs58,130.30 crore resulting in a net sale of Rs500.30 crore, as per the Sebi data.
In 2009, FIIs were net investors of Rs83,400 crore in domestic equities, the highest inflow in the country in rupee terms in a single year. It came a year after overseas investors pulled out over Rs50,000 crore.
For the sixth consecutive weeks, FIIs remained net buyer in the debt. So far this year FIIs have invested Rs11,802 crore in debt securities.