Foreign Funds Sell Over $260 Million in Equities During Week
Monday, 19 December 2011, 14:44 IST
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Mumbai: With Indian equities markets in a firm bearish grip because of slowing domestic growth and bleak global economic conditions, foreign funds pulled out over $260 million during the week ended Dec 16. The effect of the sell-off was evident on the markets. The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) fell 4.45 percent or 722.11 points in the week ending Friday at 15,491.35 points -- the lowest in 25 months. At the National Stock Exchange, the 50-scrip S&P CNX Nifty also tumbled to a two year-low and closed the week with a 4.42 percent or 215.1 points loss at 4,651.6 points. Foreign institutional investors (FIIs) have been far from optimistic about Indian stocks as the economy started showing signs of slowdown and interest rates shot up after 13 successive rate hikes by the Reserve Bank of India (RBI) since early 2010. The gross domestic product grew by the slowest in nine quarters at 6.9 percent in the July-September period. Industrial output fell into the negative, recorded at (-) 5.1 percent in October. Although, the RBI hit a pause button in the last review on Friday, companies are still burdened with high cost of credit. According to data available with the Securities and Exchange Board of India (SEBI), FIIs have been net buyers in December to the tune of a paltry $174.41 million. However, for the whole of 2011 they are net sellers, having sold off stocks worth $214.9 million as of Dec 16. Compare this to the record $28.83 billion overseas funds pumped into the Indian markets in 2010. The lack of enthusiasm for Indian stocks from overseas funds has seen equities markets settle into a bearish trend for most of the year. The Sensex has lost over 22 percent or 4,373.5 points from last year's levels. FIIs were net sellers in November off loading stocks worth $787 million, while in October they had poured in $346.51 million.
Source: IANS
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