On Friday, the net FII inflow was Rs 165 crore with purchases of Rs 241 crore, far outweighing sales of Rs 95 crore. In the first six trading sessions of the current month, FII investments have remained positive with a gross turnover of Rs 2,100 crore.

Market sources say Morgan Stanley, Schroders, Government of Singapore and Capital International have turned active buyers over the last few days. "The FII investments would have been much higher but for Templeton turning a major seller in the market, having offloaded stocks worth Rs 400 crore," said an analyst. As part of its global strategy, Templeton is narrowing the focus of its portfolio to well-managed companies.

FII investments had slowed down following the outbreak of the Kargil conflict. Market sources,however, say that FII investments will now pick up gradually, though they may not necessarily reflect in the Sensex-based stocks.