The investment by the foreign institutional investors (FIIs) on Indian stocks has touched $18 billion (Rs. 81,880 crore) so far this year. As per the data available on the SEBI website, net purchases done by FIIs this year till September 24 were worth $17.89 billion.
FIIs have bought shares worth Rs. 1,136.8 crore ($252 million) in the Indian market on 4th October 2010, which brings the year's total to $18.13 billion (Rs. 82,360 crore), according to the data showed on the Bombay Stock Exchange website.
The record investment of 2007 ($17.65 billion) was in dollar terms and in rupee terms the highest ever inflow from overseas fund houses was seen in 2009. On the other hand, the FII investment in rupee terms in 2010 is lower compared with 2009 because of appreciation in the Indian currency against the dollar.
Last year, FIIs were the net purchaser of shares worth Rs. 83,423 core ($17.45 billion), the highest ever in the Indian equity market. During the same year, the stock market benchmark Sensex had recorded a gain of over 80 percent.
In so far September alone, foreign funds pumped in $6.73 billion (Rs.31,005 crore) in local stocks, as per the SEBI data. FIIs play a significant role in domestic equity markets and their movement (inflow and outflow) causes fluctuation in benchmark indices.
And remember a liquidity driven rally has its own risks. Hope we donot forget lessons we learnt last time.
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