Bloomberg News

Foreign Funds Buy Net 4.91 Billion Rupees of Indian Equities

October 10, 2011

Oct. 10 (Bloomberg) -- Overseas investors bought a net 4.91 billion rupees ($100 million) of Indian equities on Oct. 7, paring their outflow from equities this year to 28.3 billion rupees, the nation’s market regulator said.

Foreigners bought 35.6 billion rupees of shares and sold 30.7 billion rupees, the Securities and Exchange Board of India said today. They bought a net 2.5 billion rupees of bonds, taking total flows into debt this year to 171.1 billion rupees.

The BSE India Sensitive Index has dropped 19 percent this year on concern a slowdown in the U.S. and Europe’s debt crisis will erode company profits already threatened by the most aggressive interest-rate increases among major Asian economies.

Overseas funds withdrew a net $2.4 billion from Indian stocks in August, the most since October 2008, the data show. That caused the Sensex to drop 8.4 percent that month, the worst in at least a decade, according to data compiled by Bloomberg.

India’s $1.2 trillion stock market, Asia’s fourth-biggest, is influenced by foreign fund flows. Inflows from abroad surged to a record $29.4 billion in 2010, making the Sensex the best performer among the world’s top 10 markets. The largest-ever outflow in 2008 led the biggest annual slump of 52 percent.

Foreign funds have placed 4.443 trillion rupees in stocks and 957.8 billion rupees in bonds since they were allowed into the country in 1993.

The regulator provides data on shares bought and sold by large investors, including trades in the primary and secondary markets, with a delay of at least a day.

--Editor: Sam Nagarajan

To contact the reporter on this story: Paresh Jatakia in Mumbai at pareshj@bloomberg.net

To contact the editor responsible for this story: Arijit Ghosh at aghosh@bloomberg.net


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