Foreign investors poured in over Rs 5,000 crore in the Indian stock market in a fortnight, mainly on hopes of a strong mandate for the government to be elected in polls starting next month.
Foreign institutional investors (FIIs) were gross buyers of shares worth Rs 42,035 crore and sellers of stocks to the tune of Rs 36,967 crore till March 14, resulting in a net inflow of Rs 5,068 crore (USD 828 million), according to data with the Securities and Exchange Board of India.
FIIs also infused Rs 14,140 crore (USD 2.3 billion) in the debt market during the period.
According to market analysts, a sharp drop in the current account deficit and easing inflation, which bolstered expectations that the economy will see a turnaround soon, as well as hopes for a strong mandate for the next government prompted overseas investors to pump in money in equities.
Finance Minister P Chidambaram, earlier this month, said the fiscal and current account deficits are under control and the economy is more stable than it was 18 months ago.
Foreign investors have sidelined their concerns of further tapering by the US Federal Reserve.
FIIs, the major drivers of the Indian stock market, have helped push the benchmark BSE Sensex almost 690 points, or 3.26 per cent so far this month.
Overseas investors have purchased a net Rs 7,186 crore of stocks so far in 2014. They invested a net Rs 1,404 crore in equities in February and Rs 714 crore in stocks in January.
As of March 14, there were 1,719 registered FIIs in the country and 6,318 sub-accounts.