Trading data of the last one month suggest that while foreign investors were predominantly buyers on the bourses, domestic investors were either booking profit or were not making big buy calls.

In short, they have been sitting on cash, preferring to wait for budgetary triggers before taking the plunge, brokers said.

The benchmark Bombay Stock Exchange Sensex rose by about 14 points from 6555.94 on January 31 to 6569.72 on February 25, the last trading day before the Union Budget.

While foreign funds have put in a net $1.8 billion in February so far, domestic mutual funds have put in a net Rs 20.62 crore (Rs 206.2 million).

Incidentally, mutual funds have raised more than Rs 3,500 crore (Rs 35 billion) in January and February and, going by the number of on-going equity mutual fund IPOs, another Rs 2,000-3,000 crore (Rs 20-30 billion) is expected to be raised soon.

Fund managers acknowledge that they are sitting on a high percentage of cash but add that some amount of churning has also taken place.

"While the net inflows may not be large, we have seen higher gross purchases and sales, as funds buy into new counters and book profits on some old ones," said the chief investment officer of a domestic mutual fund.

Most market entities agree that a huge amount of cash (domestic and FII) is waiting to come into the market. Most market players are hoping that the Union Budget will provide them with an opportunity to buy.

Brokers said that high networth investors, investors with big leveraged positions, private equity investors and even domestic funds have been sitting on cash, waiting for opportunities to buy after the Budget.

"Most investors are convinced that the macro growth story will continue and are waiting for the Union Budget for some kind of impetus and immediate direction."

Most have booked profits at higher levels and hope to buy back into the market at cheaper valuations, if there is a fall immediately after the Budget.

But broader consensus is that the Budget is not likely to bring any major market related changes.

FII turnover hit its highest level ever, in one session on Thursday (February 24, 2005). FII turnover (purchases plus sales) on Thursday was Rs 4,474 crore (Rs 44.74 billion) but translating into a net inflow of Rs 41.50 crore (Rs 415 million), according to figures on the Securities and Exchange Board of India website.

Deepak Chhabria, head of institutional equity at IL&FS Investsmart said, "The large volume and the absence of a substantial net number indicates a churn between foreign investors themselves."