FIIs go slow on India in last quarter of ’09

FIIs go slow on India in last quarter of ’09
The Financial Express, December 16, 2009, Page 4

fe Bureau, Mumbai

Foreign Institutional Investors (FIIs) may have picked up stocks worth around Rs 80,000 crore so far in 2009, but their purchases appear to have slowed down in the past three months. While foreign investors bought equities worth Rs 18,300 crore in September, in October that amount came down to around Rs 9,000 crore. In November, FIIs shopped for stocks worth Rs 5,500 crore. However, in December they bought equities worth Rs 6,975 crore.

The lack of any major positive triggers on the domestic or the global front prompted profit booking in key index heavy weights on Tuesday, pulling down both the benchmark equity indices for the second consecutive day. The 30-share Sensex fell 220.39 points or 1.29% to end the trading session below the psychological 17k level at 16,877.16 points. The broader 50-share Nifty closed the day lower by 1.42%, at 5,033.05 points.

Clearly, 2009 will end with the inflows topping the Rs 73,703 crore reported in 2007. Last year, of course, FIIs were sellers of Indian stocks. The huge appetite for Indian stocks has seen the benchmark indices soar. The BSE Sensex has risen from the lows of 8,047.17 points in March to a high of 17,493.17 points in October. On Tuesday, the Sensex closed at 16,877.16 points. Market watchers point out that valuations are no longer cheap and may have priced in a part of the 2010-11 earnings. Besides, there is anxiety that interest rates could go up in wake of the higher than expected inflation of 4.78% for November. Investors stayed on the sidelines ahead of the meeting of the US Federal Reserve.

Banking stocks were weak for the second consecutive session, with BSE Bankex losing 2.95% and BSE Auto index closing lower 1.93%. "The sharp surge in inflation, especially food prices, has come as a surprise for the market, dampening sentiments,” said Saikiran Pulavarthi, banking analyst at Centrum Broking.