Black Monday revisited Indian stock markets as the subprime mortgage crisis has resurfaced in the gloabl markets and has started rearing its tentacles in the Indian equity markets too. The heavy selling by the foreign institutional investors (FIIs) was the prime cause for the crash in the market on Monday. This has resulted in foreign players turning net sellers to the tune of $700 million till date in calendar year 2008 (CY08) in the Indian market after they poured in more than $17 billion in CY07.
However, the buying support by the domestic fund houses and the insurance companies has helped the bourses to recover its erosion at the close of the market.
The FIIs have turned net sellers since the beginning of the current month. They sold equity shares worth Rs 244 crore on January 2 and the selling has continued unabated since then. The FIIs were the net sellers in the market at Rs 3,560 crore till January 18, 2008.
Commenting on the pull-out by the foreign players, Jignesh Desai, head-institutional sales, SBI Capital Securities, said that the major FIIs booked profit in the domestic market to make good the losses they have incurred in the global market in the wake of sub prime crisis.
FIIs have resorted to profit booking not only in India but across the emerging markets.