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FIIs high on India again, pump in $83 m in a month

Buying activity of foreign institutional investors (FIIs) has picked up pace in recent days with Indian markets seeing the highest foreign inflows

Buying activity of foreign institutional investors (FIIs) has picked up pace in recent days with Indian markets seeing the highest foreign inflows ($83 million) in a month on Monday. According to data available on Bloomberg, FIIs have been net buyers in each of the last four trading sessions till Monday, having cumulatively bought shares worth $174.87 million.

Market players say FIIs are taking comfort from the fact that rupee has remained stable despite weakening in most other emerging market currencies.

Incidentally, among Asian emerging markets, India has seen the highest FII inflows at $625.5 million since the pace of US Fed?s monthly bond buying was slowed down.

?FII flows would remain positive towards India, which will continue to be the biggest attraction for FIIs looking at emerging markets,? said Vikas Khemani, CEO, Edelweiss Securities. While the 30-share Sensex is currently trading at p/e multiple of 16.37, prior to the beginning of tapering, the index was trading at p/e multiple of 17.68.

Analysts also say that FIIs have been value-buying in blue-chip stocks. ?Markets have corrected recently, but FIIs are anticipating a pre-election rally,? said B Gopakumar, executive vice president, head (broking), Kotak Securities.

On Tuesday, Sensex ended 170.15 points or 0.83% higher at 20,634.21 points, while the NSE?s Nifty ended 53.80 points or 0.89% higher at 6,127.10 points. In the last three trading sessions, Sensex gained 440.86 points.

On Tuesday, FIIs added another $47.13 million, according to provisional data on the exchanges.

The Sensex, however, has shed 2.53% in year-to-date with FIIs selling $154.13 million worth of equities. Emerging equity funds have come under further selling pressure after the former US Fed chairman Ben Bernanke started the second round of tapering on January 29. As per the latest data from EPFR Global, emerging equity funds pulled almost $4.5 billion out of emerging bond and equity funds over the past week.

This is on the back of $12 billion worth of outflows in the previous two weeks.

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First published on: 19-02-2014 at 04:30 IST
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