Bloomberg News

Foreign Investors Buy Net 4.56 Billion Rupees of Indian Stocks

July 06, 2012

Overseas investors bought a net 4.56 billion rupees ($82.9 million) of Indian stocks yesterday, raising their investment in the equities this year to 472.1 billion rupees, according to the nation’s market regulator.

Foreigners bought 26.7 billion rupees of shares and sold 22.1 billion rupees, the Securities & Exchange Board of India said on its website today. Foreign funds sold a net 1.87 billion rupees of bonds, paring their inflow into debt this year to 217.4 billion rupees, the data show.

Overseas investors have been net buyers of Indian stocks since June 29, the day after the government said proposed laws aimed at curbing tax avoidance won’t apply retrospectively or to cases below a certain monetary threshold. The draft guidelines released by the finance ministry on that day also proposed exempting foreign institutional investors if they refrain from routing money to India via tax shelters such as Mauritius.

Foreigners have invested 4.916 trillion rupees in stocks and 1.425 trillion rupees in bonds since they were allowed into the country in 1993.

India’s $1.1 trillion stock market, Asia’s fifth-biggest, is influenced by flows from overseas. Flows surged to a record in 2010, making the BSE India Sensitive Index (SENSEX) the best performer among the world’s top 10 markets. The largest-ever outflow in 2008 led to 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 pareshj@bloomberg.net

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


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