FIIs bullish on Indian stock mkts

Foreign institutional investors (FIIs) continued their buying spree on Tuesday, the seventh consecutive session in which they were net buyers. FIIs have been net buyers every single day after the announcement of the Budget picking up stocks worth Rs 8,473 crore in six sessions. On Tuesday, they were buyers to the tune of Rs 2,173 crore, according to data put out by the exchanges. That is among the highest amounts purchased in a single day in recent times. The 30-share Sensex (^BSESN : 17136.21 +83.67) of the Bombay Stock Exchange (BSE) Sensex rose 623 points, or 3.8%, since the Budget day.

While FIIs were net sellers in the secondary market in January and February, they have been buying shares in the primary market by subscribing to follow-on issues and IPOs. Since January, they have bought stocks worth Rs 8,355 crore worth of shares since the start of January. FII continued their buying spree on Tuesday as they purchased Rs 2,173 crore worth of equities, while domestic institutional investors (DIIs) sold shares worth Rs 171 crore, according to BSE's provisional estimates.

According to Hitesh Agarwal, head-research, Angel Broking, the FIIs booked substantial profits in 2008 and the early part of 2009 because of the global financial crisis. "Fundamentally, there was no reason for them to exit the Indian equities. That money is now coming back."

FIIs are one of the largest investors in the Indian markets and exhibit strong influence on the index movements. And they have been net buyers in all three quarters of this fiscal. In the last three quarters of fiscal 2010, they have purchased shares worth Rs 90,934 crore.

The Budget, which spelled a clear roadmap for fiscal consolidation and disinvestment of public sector companies, has added to their upbeat outlook Except 2008, the FIIs have been net buyers in Indian equities in the last five calendar years.

In 2009, they purchased Rs 84,262 worth of equities while in 2008, thanks to global recession FIIs pulled out Rs 53,796 crore from the Indian market.