Mumbai, April 10: Foreign institutional investors pumped in an additional $ 100.7 million into the Indian stock markets last Friday, the day when the markets rebounded by 7.24 per cent. This translates into Rs 439 crore, which is the largest investment in a single day in recent months. In six trading sessions beginning March 31 to April 7, the net investments of FIIs add up to a whopping $ 368 million or Rs 1606 crore.Last Friday's surge in FII investments came a day after the government clarified its stance on capital gains on FIIs based in Mauritius. Last Friday's purchases far outweighed sales suggesting that FIIs bought stocks across the board, point out brokers. Brokers continue to be bullish on the possibility of FIIs pumping in more dollars into the Indian market as the discounting for the full financial results begins.
On Friday, FIIs bought stocks worth Rs 638 crore and sold Rs 200 crore. FII transactions once again accounted for a chunk of the combined turnover of Rs 3,227 crore on both BSE and NSE. This is one of the reasons why we have seen a substantial fall in net outstanding and the fall in badla rates to 10 to 11 per cent last weekend, pointed out a broker.
The resurgence of FII investments also indicates that foreign investors were more concerned with the impact Nasdaq would have on emerging markets, say brokers. With Nasdaq rebounding and values in the Indian markets still trailing, the field was wide open for FIIs to step in with their money bags.Domestic mutual fund managers see the effect of this trickling down to the mutual funds. Mutual funds can now heave a sigh of relief given the recovery of key stocks in their portfolio by 15 to 25 per cent in three sessions.
Apart from the price cushioning, they will have more liquidity in these counters and signs of NAVs recovering can help reduce the pressure on redemptions.
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