FII inflows touch a record Rs80,500 crore in 2009

The FII investment of Rs80,500 crore in 2009 is the highest-ever inflow into the country in rupee terms in a single year, and comes a year after these investors pulled out over Rs50,000 crore from India

After their flight last year, foreign institutional investors (FIIs) flocked back to bet on the India growth story by pouring in a record Rs80,500 crore into domestic equities in 2009, reports PTI.

The FII investment of Rs80,500 crore in 2009 is the highest-ever inflow into the country in rupee terms in a single year and comes a year after these investors pulled out over Rs50,000 crore from the country.

FII inflows so far this year have broken the previous high of Rs71,486 crore parked by foreign fund houses in domestic equities in 2007.

Market analysts believe that the FII inflow into India may continue in the next year as well, if the liquidity conditions remain strong.

"FIIs will continue to be positive on our markets and in general Indian markets will fare well in 2010," said PK Agarwal, director, Purpleline Investment Advisors.


Delhi-based SMC Capital's equity head Jagannadham Thunuguntla echoed the view, saying, "If liquidity conditions remain strong next year, one can expect FII inflows to remain strong into India even in 2010 as well."

During a year when the stock market barometer added over 70% to its valuation, foreign institutional investors (FIIs) made a net investment of a whopping Rs80,500 crore (about $16.80 billion) in the Indian share market.

The Bombay Stock Exchange's benchmark Sensex, comprising 30 blue-chip stocks, has gained more than 70% so far in 2009, one of the best performers among leading global bourses.

"However, if dollar-carry trade-unwinding starts, then one can expect a rush of FII outflows from the country, resulting in pressure on Indian markets," Mr Thunuguntla cautioned.
 

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