The FIIs, after being bearish on India since November 2010, turned positive post the Union Budget presentation, which largely addressed the challenges relating to growth and liquidity despite surging inflation.
The consensus among FIIs is valuation could be a concern going ahead, but that is still some way off.
Among Sensex firms, Bharat Electronics rose the most by 4.26 per cent. HCL Tech gained 2.57 per cent, Bajaj Finance by 2.19 per cent, TCS by 1.99 per cent, Tech Mahindra by 1.88 per cent and Infosys by 1.85 per cent. Gains in Axis Bank and State Bank of India also supported the rally. However, Mahindra & Mahindra emerged as the biggest loser, falling by 2.47 per cent. Maruti dropped 1.53 per cent and Tata Motors by nearly 1 per cent due to profit-taking. UltraTech, Eternal and Power Grid were also among the laggards.
The parliamentary standing committee on finance has proposed a Securities and Exchange Board of India (Sebi) and Reserve Bank of India (RBI) co-ordination mechanism to monitor foreign investments in the stock market.
We have millions of newbie investors who are clueless about how to handle sudden and severe adverse market reactions, which arrive from time to time, observes Debashis Basu.
Even as Foreign Institutional Investors (FIIs) have been selling across markets and pulling out money, their outflow was highest from India in 2011, compared with BRIC peers (Brazil, Russia, India and China) and other emerging markets.
Among the Sensex firms, Titan, Asian Paints, ITC, Hindustan Unilever, Nestle India, Bajaj Finserv and Bharti Airtel were among the gainers. In contrast, UltraTech Cement, Tech Mahindra, Tata Steel, Power Grid, HDFC Bank, HCL Technology, State Bank of India and ICICI Bank were the laggards.
Rebalance your portfolio in case it has become overweight on equities vis-a-vis your strategic asset allocation.
Foreign institutional investors (FIIs), bearish till recently on the Indian equity market, seem to be having a change of heart.
Among the 30 Sensex firms, Bajaj Finserv, IndusInd Bank, Tech Mahindra, Bajaj Finance, Kotak Mahindra Bank, Axis Bank, NTPC, and Sun Pharma were the major gainers. On the other hand, Bharti Airtel, ITC, Adani Ports, JSW Steel and Tata Motors were among the laggards.
These investors have pumped in about Rs 6,900 crore (Rs 69 billion) in the seven trading sessions after the Federal Open Market Commission meet.
Though 2012 has started on a positive note on foreign institutional investor (FII) flows, it is too early to say if the trend will sustain through the calendar year, analysts say.
Dalal Street had a roller coaster ride in 2024 from shattering record after record to facing heavy correction off-late but equity markets still rewarded investors with positive returns, driven by a surge in domestic fund flows and a resilient macro landscape. The first half of the year saw robust corporate earnings, a surge in domestic flows, and a resilient macro landscape, driving the Nifty to an all-time high of 26,277.35 in September 2024, according to Motilal Oswal Wealth Management.
Bajaj Finserv, Infosys, Mahindra & Mahindra, Tech Mahindra, Hindustan Unilever, State Bank of India and HCL Technologies were the biggest gainers. On the contrary, Asian Paints, JSW Steel, NTPC and Adani Ports were among the laggards.
Exuding confidence that current account deficit (CAD) will come down to 3.7 per cent of GDP in 2012-13, Finance Minister P Chidambaram on Monday said overseas capital flows would be sufficient to bridge the gap in inflow and outflow of foreign funds.
Global trends, trading activity of foreign investors and domestic macroeconomic data announcements would dictate terms in the equity market in a holiday-shortened week ahead, analysts said. Equity markets would remain closed on Wednesday for Gandhi Jayanti. "Looking ahead, it will be interesting to monitor Foreign Institutional Investors (FIIs) and their flow into India.
Realty FII norms, which were recently put outside the purview of Press Note 2 (2005), are vague about pre-IPO investments.
The sell-off in the equity markets, especially by foreign institutional investors, could have a ripple effect across asset classes and adversely impact consumer spending.
India's weight in the emerging market portfolios of foreign institutional investors (FIIs) has risen by about 100 basis points in June to 7.96 per cent as compared to May.
'We continue to view India as a standout within EM.'
FIIs have a particular bias for the last five trading sessions in the quarter-ending months of March, June, September and December.
Reserve Bank has expressed dissent at the finance ministry panel's suggestion on allowing foreign institutional investors to issue Participatory Notes and allowing them to take exposure in India's debt instruments.
The US Federal Reserve's interest rate decision is the biggest event that would drive sentiments in the domestic stock market this week, besides a host of macroeconomic data from the global front and trading activity of foreign investors, analysts said. The Indian equity market had an exceptional last week, with both the Nifty and Sensex hitting their all-time high levels on Thursday.
Stock markets would take cues from the upcoming macroeconomic data announcements and global trends besides keeping a watch on the trading activity of foreign investors, analysts said. The last batch of the ongoing earnings calendar would trigger stock-specific action, traders said. "This week, we have to deal with macroeconomic data on both the domestic and global front.
Experts expect the trend to continue in the near term.
Continued outflows amid moderation of domestic investments are a concern
The Indian markets have delivered high long-term returns, second only to the US.
FIIs fear short-term capital gains would give rise to tax uncertainty and make their operations difficult, reports Pavan Burugula from Mumbai.
India's stock markets corrected recently but foreign money is likely to chase China rather than India in the short-to-medium term, said Chris Wood, global head of equity strategy at Jefferies, on Thursday. Wood told the Business Standard Manthan Summit in New Delhi he is bullish about Indian equities from a long-term perspective, but for the short term he is cautious given the quantum of foreign investor (FII) outflows and valuation woes.
Investors are willing to wait to give a new government a chance.
Among the Sensex firms, Wipro, HCL Technologies, NTPC, Reliance Industries, Infosys, IndusInd Bank, Tech Mahindra and Tata Consultancy Services were the major laggards. IT stocks fell on profit-taking after rallying sharply in the past two sessions. Tata Steel, Titan, Maruti, Larsen & Toubro, ITC and JSW Steel were among the gainers.
FIIs' net outflows have been Rs 47,706.2 crore (Rs 477.06 billion) till March 30 in the financial year 2008-09 as against huge inflows of Rs 53,000 crore (Rs 530 billion) in the previous fiscal, according to latest information on the Securities and Exchange Board of India website.
According to the global financial services major, FII flows in May were mixed, with investors being more selective.
Quarterly earnings of corporates, trading activity of foreign investors and inflation data are the key factors that are expected to drive the momentum in the equity markets this week, analysts said.
'In the overall global portfolio, India's weighting has come down in the past seven months.'
India gains at the expense of Russia and Brazil
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