Bloomberg News

Foreign Funds Sell Net 1.78 Billion Rupees of Indian Equities

October 24, 2011

Oct. 24 (Bloomberg) -- Overseas investors sold a net 1.78 billion rupees ($35.6 million) of Indian stocks on Oct. 21, increasing total outflow from equities this year to 15.8 billion rupees, the nation’s market regulator said.

Foreigners bought 13.8 billion rupees of shares and sold 15.5 billion rupees, the Securities and Exchange Board of India said today. They bought a net 5.35 billion rupees of bonds, taking total flows into debt this year to 209.7 billion rupees.

The BSE India Sensitive Index has dropped 17 percent this year, on concern a slowdown in the U.S. and Europe’s debt crisis may 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, making the gauge’s worst August in at least a decade, according to Bloomberg data.

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 4.455 trillion rupees in stocks and 996.4 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: Abhay Singh

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

To contact the editor responsible for this story: David Merritt at dmerritt1@bloomberg.net


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