Foreign Funds Pump in Over $1.16 Billion

Monday, 23 January 2012, 14:50 IST
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Foreign Funds Pump in Over $1.16 Billion
Mumbai: Indian equities markets have started off well in 2012 with benchmark indices rallying over 8 percent in just three weeks on increased investor confidence and healthy buying appetite by overseas funds who have pumped in over $1.16 billion. According to data available with the Securities and Exchange Board of India (SEBI), FIIs have been net buyers till Jan 20 to the tune of a whopping $1.16 billion. Last week saw them pumping in over $694 million into equities. The effect of the buying was evident on the markets. The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) rose over 1,284 points or 8.3 percent to close Friday at 16,739.01 points. At the National Stock Exchange, the 50-scrip S&P CNX Nifty gained 9 percent in the first three weeks of 2012 and closed Jan 20 at 5,048.6 points. Foreign institutional investors (FIIs) were far from optimistic about Indian stocks in 2011 as the economy showed signs of slowdown and interest rates shot up after 13 successive rate hikes by the Reserve Bank of India (RBI) since early 2010. FIIs net sales were worth $357.8 million in equity in the last year, a far cry from the record $28.83 billion they pumped into the Indian markets in 2010. What is driving this three-week bull run is mainly the hope that the RBI will start easing interest rates soon as inflation has shown a significant decline in recent weeks. As per latest data, India's annual food inflation continued to be in the negative for the third straight week. It was recorded at -0.42 percent for the week ended Jan 7 as compared to -2.9 percent and -3.36 percent consecutively in the previous two weeks. Overall inflation, based on the wholesale price index (WPI), was down to a two-year low of 7.47 percent in December. In the coming week, all eyes will be on RBI which is set to conduct its monetary policy review Jan 24.
Source: IANS
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