Overseas funds were net sellers of Indian equities for the first time in 12 sessions, pulling out 944 million rupees ($18.4 million) yesterday, according to the nation’s market regulator.
Foreigners bought 39.9 billion rupees of shares and sold 40.84 billion rupees, the Securities & Exchange Board of India said on its website today. The withdrawals contributed to the BSE India Sensitive Index (SENSEX) falling to a two-month low yesterday.
The Sensex has risen 12 percent this year, poised for its first quarterly advance since the three months ended December 2010, as foreign funds bought a net $9.1 billion of shares this year on optimism the central bank will lower interest rates to spur economic growth that moderated to 6.1 percent last quarter from a year earlier, the slowest pace in almost three years.
Goldman Sachs Group Inc. last week raised its recommendation on Indian equities because of lower risks from the European debt crisis and the prospect of faster domestic economic growth, while HSBC Plc upgraded yesterday its rating on Indian stocks to overweight from neutral. Europe is India’s third-largest trading partner, taking in a fifth of the Asian nation’s merchandise exports.
Overseas investors sold a net 3.37 billion rupees of bonds yesterday, reducing flows into debt this year to 239.1 billion rupees, the data show. They put 421 billion rupees in bonds in 2011. Foreigners have invested 4.893 trillion rupees in stocks and 1.446 trillion rupees in bonds since they were allowed into the country in 1993.
India’s $1.2 trillion stock market, Asia’s fifth-biggest, is influenced by flows from overseas. Flows from abroad surged to a record 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.
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.
To contact the reporter on this story: Paresh Jatakia in Mumbai at firstname.lastname@example.org
To contact the editor responsible for this story: Arijit Ghosh at email@example.com