The stock-selling spree unleashed by foreign institutional investors over the past one month from November has turned them net sellers in the cash market this calendar year. But the markets have shown resilience mainly due to big buying by insurance companies, say experts.

Provisional figures available on the Bombay Stock Exchange website suggest that FIIs have been net sellers of Rs 21,690 crore (Rs 216.9 billion) or $5.5 billion in less than two months from November 1, till on Thursday.

The domestic institutions, led by insurance companies, on the other hand, have bought a net of Rs 12,212 crore (Rs 122.12 billion) or $3.13 billion during the same period.

If one looks at the figures from January 1, till date, FIIs appear to be net sellers of Rs 2,831 crore (Rs 28.31 billion) in the cash market, while the domestic institutions have net purchased equity worth Rs 23,130 crore (Rs 231.3 billion) this calendar year.

According to some top stock brokers, it was the huge participatory notes (P-notes) positions held by FIIs, which had resulted in their wielding more influence over the stock markets during the past couple of years.

However, sources say, the move by the Securities and Exchange Board of India to curb P-notes investments in equity markets has been the main catalyst forcing FIIs to sell recently.

Ambrish Baliga, the vice-president of Karvy Securities, says one cannot rule out the fact that some unwinding of P-notes by FIIs has already happened.

"It is also likely that in the coming 6-4 months, there would be some more unwinding of P-notes happening as a consequence of which we may see more selling by FIIs," he said.

Brokers say that among domestic institutions investing in the stock markets it is the insurance behemoth Life Insurance Corporation, with a current estimated investment of over $40 billion in equities, exerting a greater influence in the stock markets.

Puneet Nanda, chief investment officer, ICICI [Get Quote] Prudential Life Insurance, says that investments by insurance companies are now acting as a counter-force for FIIs.

"The inflow of money into insurance companies has increased due to unit-linked insurance plans, where more and more people are choosing to invest in equity rather than debt. This financial year (2007-08), we estimate nearly $12-15 billion would be invested by insurance firms in stock markets," he said.

Brokers estimate that LIC [Get Quote] alone has recently bought over 50 per cent of the equity sold by FIIs. According to analysts, a clear indication that FII influence has decreased in the markets recently can be judged by the fact that key benchmark stock indices are holding on and have weathered the FII selling.

The BSE Sensex, which had plummeted by over 2,000 points in November after hitting the 20K mark in October, once again picked up momentum to hit a new high of 20,498 on December 13, despite the FII selling.