FII back; invests Rs87,987 cr in ’09: Economic Survey

FII back; invests Rs87,987 cr in ’09: Economic Survey

New Delhi: After a lull in 2008, Indian equities once again became the favourite bet for foreign funds, who pumped in nearly Rs88,000 crore in domestic shares in 2009, the Economic Survey said on Thursday.

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While foreign institutional investors (FIIs) purchased equities worth Rs7.36 trillion in gross and recorded a gross sale of Rs6.48 trillion in 2009, resulting in a net purchase of Rs87,987 crore at the end of the year.

FII inflow so far this year has broken the previous high of Rs80,915 crore parked by foreign fund houses in domestic equities in 2007.

The FII inflow of Rs87,987 crore in 2009 is the highest ever in the country in rupee terms in a single year.

This comes a year after they pulled out over Rs41,216 crore, from the domestic bourses -- a trend triggered with the collapse of global financial services icon Lehman Brothers in the middle of September 2008.

This selling trend continued till the first two months of 2009. However, with the sign of revival in global economies, the trend turned positive during March and overseas investors started betting big on the domestic bourses.

The trend of strong FII inflows to the tune of Rs31,000 crore (about $6.3 billion) witnessed during April-June quarter of 2009 gained further during the September quarter and the period witnessed an infusion of hefty Rs34,313 crore.

In the December quarter, foreign fund houses made a net investment of about Rs25,000 crore in the stock market, amid a period that witnessed the Dubai debt crisis.

Buoyed by FII inflow during 2009, the stock market barometer Sensex gained over 70%, one of the best performer among leading global bourses, to 17,464.81 points.

During the year, the number of registered FIIs increased by 112 to 1,706, while the tally of registered sub-accounts rose by 459 to 5,331, the Survey said.

The FII inflow in spot market increased to Rs83,424 crore in 2009, as compared to withdrawals of Rs52,987 crore in 2008. However, foreign fund investment in debt market dropped to Rs4,563 crore n 2009, from Rs11,772 crore in 2008, the survey added.