UPA-II effect: FIIs infuse Rs 24k cr in stock mkts in 100 days

Written by Press Trust of India | New Delhi | Updated: Sep 1 2009, 04:37am hrs
Call it the effect of the Congress-led UPA government or a hope of a revival for the Indian stock markets, the country has witnessed an inflow of nearly Rs 23,700 crore from overseas investors since the new term of Prime Minister Manmohan Singh.

An analysis of the foreign institutional investors (FIIs) activity shows that since May 22, the day Prime Minister took oath for a second term to lead the United Progressive Alliance government, FIIs have made a net investment of Rs 23,688.8 crore in the domestic stock markets.

On August 29, the UPA government completed its 100 days in office with a mixed bag of good work on certain fronts while stumbling on several issues.

The inflow during the period (May 22-August 29) accounts for over 65% of the total FII inflow into the Indian stock markets.

According to the data available with market regulator Securities and Exchange Board of India (Sebi), in 2009 FIIs have made a net investment of Rs 39,179.60 crore so far.

During the period under review, July witnessed an inflow of Rs 11,066 crore, the highest in a month. In June, the inflow was Rs 3,830 crore, while in August it is Rs 3,810 crore.

FIIs have confidence in the India growth story and have invested at a cheaper level. Now that markets have moved up more participation would be seen as the foreign funds would like to be left out for participating in the rally, SMC global vice-president Rajesh Jain said.

During the same period, Bombay Stock Exchanges benchmark index Sensex gained 15% to 15,922.34 level. On May 22, Sensex had ended at 13,887.15.

The governments 100-day programme reflected the Prime Ministers words who made it clear to his Cabinet colleagues that business as usual will not do.

The Union Budget 2009-10, presented by finance minister Pranab Mukherjee sought to double the outlays for rural development at a time of sluggish growth, which is expected to be 6% this year.

The government has also come out with a new direct taxes code, which promises to simplify direct tax laws and promises to put more money in the pocket of the tax payer. It also came out with a trade policy with an ambitious target of $ 200 billion exports for 2010-11.