FII cumulative investments in stocks reach $125 bn during 2012
investor sentiment have led to a renewed interest among the foreign investors.
"FIIs pumped in capital into the Indian equities as the lack of investment options make the country an attractive destination. Indian market has attracted the highest amount of foreign flows compared with Asian peers so far in 2012," Destimoney Securities Sudip Bandhopadhyay said.
CNI Research's CMD Kishor Ostwal said, "India has had an excellent year so far after a disastrous 2011. I think Indian valuations look cheaper compared to historical average."
This is the second time in history that net FII inflows for a year have crossed the Rs 1 lakh crore mark and analysts are optimistic about the next year.
Moreover, FIIs were also seen pouring money in the debt market and infused Rs 33,777 crore (USD 6.4 billion) during the year in the segment.
Since opening up of Indian markets for FIIs in 1992, they have made a cumulative net investment of Rs 5.67 lakh crore (USD 125 billion) in shares and Rs 1.55 lakh crore (USD 32 billion) in the debt segment.
After a disastrous 2011, FIIs began 2012 on a positive note and infused more than Rs 36,000 crore in the first two months, as the Reserve Bank paused in rate hikes that improved liquidity position .
But foreign investors turned negative after government's anti-tax avoidance rule (GAAR) proposal announced early this year that led to continued outflow till June.
Market experts attributed the outflow to a host of factors including the GAAR proposal and ratings agency S&P's move to lower
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