FIIs pull out Rs. 1,700 cr from equities so far in Jan

  

Overseas investors have pulled out nearly Rs. 1,700 crore from the Indian stock markets so far in January following a steep fall in crude oil prices amid slowing global growth.

The outflow comes after FII investments in equities hit a 10-month low of Rs. 2,100 crore in December.

These investors got re-christened as FPIs or Foreign Portfolio Investors last year under a new regulatory regime that promises to make it easier for them to invest in India.

Foreign investors were gross buyers of equities worth Rs. 18,544 crore between January 1 and 9, while they sold shares amounting to Rs. 20,216 crore — a net outflow of Rs. 1,673 crore ($264 million) for the period, latest data with Central Depository Services Ltd (CDSL) showed.

Debt market inflows

However, overseas investors took a bullish stance on the Indian debt market and invested Rs. 2,620 crore during the period.

Market analysts attributed the FIIs outflow to fall in crude oil prices.

“The steep decline in oil price is positive for all consumers including big importers like India, as it helps in narrowing their trade deficit and strengthens their currencies,” CNI Research Head Kishor Ostwal said.

“In contrast, for the oil producers this is a negative news as it lowers their export earnings. Given that many countries are dependent on oil exports, their growth would be affected,” he added.

Crude oil prices

Brent crude oil price is hovering at around $51 per barrel. On January 7, it fell below $50 a barrel — first time since May 2009 — mainly due to increased supply of oil and slowing global growth. It had dropped to as low as $49.66 a barrel on that day.

In 2014, the net investment by overseas investors into the equities was Rs. 98,150 crore, while in the debt market it was Rs. 1.6 lakh crore, aggregating Rs. 2.58 lakh crore.

FII equity inflows hit 10-month low of Rs 2,100 cr in December

Overseas investors pumped in a little over Rs 2,100 crore in the Indian equity markets in December, making it the lowest investment in 10 months, primarily on account of profit booking.

The net investment by Foreign Institutional Investors (FIIs) for the entire 2014 was more than Rs 98,000 crore.

These investors got re-christened as FPIs or Foreign Portfolio Investors last year under a new regulatory regime that promises to make it easier for them to invest in India.

 According to latest data, FIIs have made a net investment of Rs 2,132 crore in the stock markets in December.

This was the lowest investment by FIIs in a single month since last February, when they had pumped in a net amount of Rs 1,404 crore.

Market analysts attributed the low inflow to profit booking, even though the central government took up the ordinance route to raise the overseas investment ceiling in insurance sector. 

However, experts are of the view that there is nothing to worry and FIIs will be back to the Indian stocks markets this month.

Apart from equities, foreign investors have infused a net of Rs 11,836 crore in debt markets last month.

In 2014, the net investment by overseas investors into the equities was Rs 98,150 crore, while in the debt markets it was Rs 1.6 lakh crore, aggregating to Rs 2.58 lakh crore. 

First time in 2014: FIIs turn net sellers In October

Following the US Federal Reserve’s move to end its quantitative easing programme and amid weak corporate results, foreign institutional investors (FIIs) significantly reduced fund inflow in Indian equities in October. Net inflow turned negative for the first time in 2014 in October as they pulled out a net of Rs 1,171 crore in the month.

* While FIIs remained net sellers for a large part of the month, Bank of Japan’s announcement to accelerate bond buying programme led to a rise in inflow into Indian equities in the last couple of days in October

* The net inflow into Indian equities for the year stood at Rs 82,264 crore at the end of the month

* Debt inflow in October, however, stood strong at Rs 17,903 crore taking the net inflow for the calendar year to a record of Rs 1,36,243 crore as the money kept flowing due to high interest rates in the country

* Aggregate of debt and equity inflows crossed $36 billion (Rs 2,18,506 crore) in 2014 — an all-time high

SUMMARY: The net inflow into Indian equities for the year stood at Rs 82,264 crore at the end of the month.

FII inflows in equities hit 7-month low of Rs 5,100 crore in September 2014

Overseas investors have pumped in a little over Rs 5,100 crore in Indian equity markets in September, making it the lowest net investment in seven months.

Foreign investors were gross buyers of equities worth Rs 93,493 crore last month, while they sold shares amounting to Rs 88,391 crore - translating into a net investment of Rs 5,102 crore ($845 million) for the period, as per the latest data.

This was the lowest net investment by foreign investors in equity markets since February when they had infused Rs 1,404 crore.

Market analysts said the government's decision to defer gas price hike coupled with the Supreme Court's verdict on cancellation of coal blocks provided foreign investors some reason to offload shares.

Foreign investors are still upbeat on the Indian equity market, they added.

However, overseas investors (Foreign Institutional Investors, sub-accounts or foreign portfolio investors) continued to bet on the debt market and poured in close to Rs 16,000 crore ($2.6 billion) in this segment.

Since the beginning of this year, foreign investors have infused a net amount of Rs 83,438 crore ($14 billion) into the share market, while they invested a net of Rs 1.18 lakh crore into the debt market ($19.6 billion).

Strong inflows in the previous months have taken the cumulative net investments of foreign investors into Indian capital markets (equity and debt) to $204 billion, or Rs 9.88 lakh crore, in nearly 22 year period.