FIIs make $2.2bn net investment in March
Despite the strong showing in March, FIIs remain sellers on a net basis in 2016.Their net sales in the equity markets stand at Rs 2,113 cr so far in the current year.
By M Allirajan, TNN | Updated:
NEW DELHI: After pulling out funds from the Indian markets for four consecutive months, Foreign Instituional Investors (FIIs) are back with a bang. FIIs have made net investments of about Rs 14,534 crore $2.2 billion so far in March (till 22nd), data with share depository NSDL showed. They bought more shares than what they sold in value terms in all but whole trading sessions during the month.
Incidentally , FIIs net sold shares to the tune of around Rs 26,538 crore ($4 billion) between November and February. Despite the strong showing in March, FIIs remain sellers on a net basis in 2016.Their net sales in the equity markets stand at Rs 2,113 crore so far in the current year.
After pumping about Rs 97,000 crore into the Indian markets in 2014, overseas investors turned cautious in he middle of 2015, following poor growth in corporate earnings and tepid recovery in economic growth. The sharp slowdown in China and the sell-off in global markets that followed spooked investors, triggering a pull-out from the Indian markets.
The benchmark sensex and nifty have lost 10.5% and 10.1% respectively in the past one year. “Markets had fallen 20% from their peak. So, valuations have become cheap,“ says G Chokkalingam, founder and managing director (MD), Equinomics Research and Advisory .
“Emerging market (EM) stocks are available at distressed valuations. This has resulted in FIIs taking a fresh look at these markets,“ says Deven Choksey , MD, KR Choksey Shares and Securities.
EMs such as India also benefited from the aggressive monetary stimulus of the European Central Bank and the central banks of Japan and China, market experts said. The recovery in commodity prices, especially crude oil, has also reduced fears of a global deflation, they said.
The drop in inflation has also increased the prospects of a rate cut by the Reserve Bank of India (RBI) boosting market sentiments, experts said. The stock markets have been on the upswing after the government slashed interest rates on centrally-sponsored savings schemes, giving banks greater flexibility to lower deposit rates and fully pass on the previous interest rate cuts to borrowers.
“Also, with the government adhering to its fiscal deficit targets and inflation at a four-month low in February, it is expected that the RBI will cut rates in its monetary policy review due on April 5,“ market observers said.
Incidentally , FIIs net sold shares to the tune of around Rs 26,538 crore ($4 billion) between November and February. Despite the strong showing in March, FIIs remain sellers on a net basis in 2016.Their net sales in the equity markets stand at Rs 2,113 crore so far in the current year.
After pumping about Rs 97,000 crore into the Indian markets in 2014, overseas investors turned cautious in he middle of 2015, following poor growth in corporate earnings and tepid recovery in economic growth. The sharp slowdown in China and the sell-off in global markets that followed spooked investors, triggering a pull-out from the Indian markets.
The benchmark sensex and nifty have lost 10.5% and 10.1% respectively in the past one year. “Markets had fallen 20% from their peak. So, valuations have become cheap,“ says G Chokkalingam, founder and managing director (MD), Equinomics Research and Advisory .
“Emerging market (EM) stocks are available at distressed valuations. This has resulted in FIIs taking a fresh look at these markets,“ says Deven Choksey , MD, KR Choksey Shares and Securities.
EMs such as India also benefited from the aggressive monetary stimulus of the European Central Bank and the central banks of Japan and China, market experts said. The recovery in commodity prices, especially crude oil, has also reduced fears of a global deflation, they said.
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The drop in inflation has also increased the prospects of a rate cut by the Reserve Bank of India (RBI) boosting market sentiments, experts said. The stock markets have been on the upswing after the government slashed interest rates on centrally-sponsored savings schemes, giving banks greater flexibility to lower deposit rates and fully pass on the previous interest rate cuts to borrowers.
“Also, with the government adhering to its fiscal deficit targets and inflation at a four-month low in February, it is expected that the RBI will cut rates in its monetary policy review due on April 5,“ market observers said.
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