Foreign institutional investors (FIIs) were gross buyers of shares worth Rs 4,157 crore and sellers of equities worth Rs 3,148 crore till January 3, resulting in a net inflow of Rs 1,009 crore (USD 163 million), according to Sebi data.
FIIs also invested Rs 1,746 crore in the debt market. Their total investment in debt and equity was about Rs 2,754 crore.
The US Federal Reserve decided to taper its monthly bond-buying programme, raising concerns that funds available for investing in emerging markets may be reduced.
Starting this month, the US central bank will cut its bond purchases to USD 75 billion from USD 85 billion, according to a statement after the Federal Open Market Committee meeting on December 18.
Last month, the Reserve Bank of India ruled out any major impact on the domestic markets by the tapering of the US bond-buying programme.
Finance Minister P Chidambaram had also asserted that India is better prepared to deal with the impact of the US stimulus withdrawal and said its consequences would not be large and more steps would be taken, if needed.
FIIs, the driving force of the Indian stock markets, infused a net Rs 1.13 lakh crore (USD 20.10 billion) in equities last year, compared with a net inflow of Rs 1.3 lakh crore (USD 24 billion) in equities in 2012.
As of January 3, the number of registered FIIs in the country stood at 1,738 and the total number of sub-accounts was at 6,392.