FIIs turn optimistic, invest Rs 1000 crore in October

31 Oct 2011 Evaluate

The Foreign Institutional Investors (FIIs) turned bullish after the two months of outflows in the month of October. According to the data available with the Securities and Exchange Board of India (SEBI), the FIIs have purchased stocks and debt securities worth a gross amount of Rs 58,483.40 crore and sold securities valued around Rs 57,470 crore, which means that a net inflow of Rs 1,014.30 crore.

This net inflow of Rs 1,000 crore indicates that the Indian capital market has seen an upward movement. However, in the last two months, foreign investors were seen investing in gold. The market experts are of the view that the FIIs will continue to invest money into developing nations.

On the same time, the 30-share Sensex increased by 8% or 1,351.04 points in month of October. During last trading session, the Bombay Stock Exchange (BSE) finished at 17,804.80, up 515.97 points from its last close, which is biggest one day gain from August 29, when it surged by 567.5 points.

In last two months, the FIIs have experienced an outflow. During August, FIIs pulled out around Rs 8,000 crore from the Indian stock and debt markets, which is highest monthly withdrawal since October 2008. Last month FIIs had withdrawn around Rs 1,866 crore.

Market experts are of the view that the heavy selling by the FIIs was on the back of current debt crises in the eurozone and weakness in the United States’ economy. During October, FIIs were optimistic on the debt market and invested around Rs 1,697.30 crore whereas FIIs sold around Rs 683 crore from the equity market in the same time.

In the current year, FIIs have invested around Rs 18,679 crore into stock and bond markets from Rs 1,79,674 crore in the whole of 2010. The number of FIIs registered with SEBI stood at Rs 1,749 till October 2011 whereas the number of Sub-FIIs was 6,058 in same month.