The investment by overseas investors into the Indian stock market since the beginning of 2013 has crossed $7-billion mark, out of which more than $3 billion were pumped in February alone.
Foreign Institutional Investors (FIIs) infused $3.23 billion (about Rs 17,211 crore) during February, taking the total to $7.29 billion (Rs 39,270 crore ).
Market analysts attributed the strong FII inflows to signs of easing interest rates by the Reserve Bank of India and the subsequent impact of improved liquidity position.
Additionally, a slew of measures taken by the Government, including the postponement of GAAR (General Anti Avoidance Rules) implementation by two years to April 1, 2016 and partial decontrol in diesel prices have also attracted foreign investors.
Equity, debt market investments
During February, FIIs were gross buyers of shares worth Rs 34,298 crore, while they sold equities amounting to Rs 17,087 crore, translating into a net investment of Rs 17,211 crore ($3.23 billion), as per data available with market regulator SEBI.
Foreign fund houses also infused Rs 1,249 crore ($234 million) in the debt market in February. This takes the overall net investment by FIIs to Rs 4,196 crore ($785 million) so far in this calendar year.
Reform measures, liquidity infusion
“FIIs have been betting high on Indian equities since the last six-seven months and reform measures taken by the government has further boosted the sentiment,” Wellindia Executive Director Hemant Mamtani said.
“Besides, FIIs have been infusing money into the Indian market on account of change in RBI’s monetary policy that has added liquidity to the system. This liquidity will help in the growth of the country,” he added.
FIIs bought equities worth $24.4 billion in 2012, about $5 billion below the record purchases two years ago.
The stock market barometer Sensex has gained 58 points so far this year to end at 19,484.77 points on Friday.
As on February 8, the number of registered FIIs in the country stood at 1,761 and the total number of sub-accounts were 6,333.