FIIs turn net buyers on bottomfishing

Our Markets Bureau

Mumbai, Oct 14: Bottomfishing by the foreign institutional investors (FIIs) in the domestic bourses during October have turned them into net buyers while the domestic mutual fund (MFs) investors, led by the Unit Trust of India (UTI), remained net sellers throughout the current month.

A dealer with a domestic brokerage said: “FIIs resorted to bottom fishing during the week which helped the Sensex gain about 146 points during the week ended October 12. There were good reasons for them to adopt this strategy as the fears of prolonged war being factored into, not only by the domestic bourses and players but also by the trigger providers benchmarks of Nasdaq and NYSE. Both Nasdaq composite and Dow Industrial Average have recovered considerably after the September 11 attacks in the US.”

After an early set-back on Monday, the Sensex gradually moved upwards to a high of 2989.63 before ending the week at 2959.39 as against the previous weekend’s close of 2812.90 — up 146.49 points. This is clearly reflected in the investment trend of the foreign players as they turned net buyers in both the equity and debt segments, according to investment data of FIIs released by the Securities and Exchange Board of India (Sebi).

For the month of October, FIIs’ gross purchase stood at Rs 1,548.10 crore. Out of this, equity purchases were to the tune of Rs 1,495.70 crore and debt buying was worth Rs 52.40 crore. FIIs’ gross selling of Rs 995.80 crore consisted equity selling of Rs 985.70 crore and debt offloading of Rs 10.10 crore. The FIIs remained net buyers for Rs 510 crore in equity and of Rs 42.30 crore in debt. As a result, the total investment by FIIs for the current year has also jumped from the previous month’s Rs 12,183.80 crore to Rs 12,729 crore in October.

Even for the trading week October 11, FIIs were net buyers in equities at Rs 330 crore ($69.30 million), while the MFs continued to remain net sellers at Rs 184.64 crore. FIIs and MFs, however, remained net buyers in debt at Rs 24.90 crore ($5.2 million) and Rs 215.89 crore, according to the data released by Sebi.