FIIs put in $3.4bn in equities in May

Overseas investors have poured in more than Rs 18,000 crore ($3.4 billion) into the Indian equity market so far this month despite macro economic concerns.

With this, the total foreign investment in the country's equity market has reached Rs 79,554 crore ($14.72 billion) since the beginning of the year.

During May 2-24, foreign institutional investors were gross buyers of shares worth Rs 56,767 crore, while they sold equities amounting to Rs 38,250 crore , resulting in a net inflow of Rs 18,518 crore ($3.4 billion), according to the data available with market regulator Sebi.

FIIs net investment had plunged to the lowest level in 16 months during April, attracting net inflow of Rs 5,414 crore.

Market experts said that Indian economy may be slowing but FIIs have kept the faith because of improved global liquidity situation and some softening in crude as

well gold prices, which may help contain the already very high current account deficit.

They said inflows slowed last month because of a slew of factors such as profit-booking, the high current account deficit and political uncertainty.

Standard & Poor's had warned, earlier this week, that it may downgrade India's sovereign rating to junk grade if the government fails to pursue reforms and check deterioration in fiscal and current account deficit in the next 12 months.

Apart from equity, FIIs have also poured in Rs 9,255 crore ($1.74 billion) into the debt market during the month taking the total investment to Rs 27,334 crore (about $5 billion) in the segment so far this year.

FIIs, the main drivers of the Indian stock market, have pushed up the BSE 30-stock index, Sensex by 200 points in May so far to 19,704.33 points (Friday's close).

As on May 24, the number of registered FIIs in India were 1,764 and total number of sub-accounts were at 6,384.