FIIs turn bullish, invest Rs 1,000 crore in October

MUMBAI: After pulling out in the last two months, foreign funds have turned bullish and infused over Rs 1,000 crore in the Indian markets in October.

During October 3-28, overseas investors have purchased stocks and debt securities worth a gross amount of Rs 58,483.40 crore and sold securities valued Rs 57,470 crore. This translated into a net inflow of Rs 1,014.30 crore, according to the data available with the Securities and Exchange Board of India (Sebi).

"In October, the Indian market has seen an upward movement, so FIIs invested in the market. In the last two months, overseas investors were pouring money in gold," Geojit BNP Paribas Research Head Alex Mathew said.

He added, "Over the coming months, FIIs will continue to infuse capital in the BRIC countries."

Meanwhile, the 30-share Sensex rose by 1,351.04 points, or 8 per cent, in October. In the last trading session, the BSE finished at 17,804.80, up 515.97 points from its previous close --the biggest one-day gain since August 29, when it had soared by 567.50 points.

In August and September, foreign institutional investors (FIIs) witnessed an outflow. In August, foreign funds pulled out nearly Rs 8,000 crore, or USD 1.8 billion, from the Indian stock and debt markets -- the highest monthly withdrawal since October, 2008. Last month, they withdrew Rs 1,866 crore.

Market analysts believe heavy selling by FIIs was triggered by the ongoing debt crisis in the euro zone and a weakness in the US economy.

In October, FIIs were bullish on the debt market and poured in Rs 1,697.30 crore, while they pulled out Rs 683 crore from the equity market in the same period.

So far this year, FIIs have pumped in Rs 18,679 crore into stock and bond markets, compared to about Rs 1,79,674 crore in the whole of 2010.

The number of FIIs registered with Sebi stood at 1,749 as of October this year, while the number of sub-FIIs was 6,058 during the month.