Foreign funds were net sellers to the tune of Rs 934.8 crore and Rs 1401.8 crore in June and July respectively.The net buying in August was less than February and April, when foreign funds net purchased Rs 3,084.1 crore and Rs 2,586.7 crore of stocks respectively.FIIs have net bought Rs 6328.5 crore worth of scrips for the first eight months of this calendar year, which is only slightly less than Rs 6,696.8 crore worth of pivotals for the entire 1999, the figures revealed.

The trend in August to an extent allayed apprehensions that FIIs will reduce exposure to the Indian market because of re-allocation of funds in emerging markets in favour of some southeast Asian markets. However, deteriorating macro economic fundamentals could have negative bearing on their investment, market analysts said. Deceleration of export growth in July, likelihood of increase in trade deficit because of rise in petroleum prices and softening of rupee despite qualitative measures by the RBI may have a dampening effect on FIIs investment in months to come, they said.