Foreign funds invested nearly Rs 1,800 crore (Rs 18 billion) in the Indian stock and debt market during the first nine trading sessions this month, according to capital market regulator Sebi.
Analysts expect FII investments to reach Rs 5,000 to 6,000 crore (Rs 50 to 60 billion) in the Indian equity and bond market by the end of September.
From September 2-13, overseas investors purchased equity and debt securities worth Rs 28,757 crore (Rs 287.57 billion), while selling securities worth Rs 26,981 crore (Rs 269.81 billion), a net inflow of Rs 1,775.60 crore, or USD 393 million, as per the Securities and Exchange Board of India (Sebi) data.
Foreign Institutional Investors (FIIs) have turned net buyers, after a heavy pull out of Rs 7,902.50 crore (USD 1.76 billion) last month - the highest monthly withdrawal since October, 2008.
They were net sellers to the tune of about Rs 13,489 crore (Rs 134.89 billion) in October 2008.
"FIIs are generally nervous due to the global situation, so they are considering emerging markets such as India as safe option,"
Destimoney Securities MD and CEO Sudip Bandyopadhyay said.
Another expert, Kishor Ostwal, CMD of CNI Research said, "Market is at a low level and FIIs are not seeing much downside. So, they are investing in Indian equities".
FIIs were bullish on the equity market and made an investment of Rs 2,041.3 crore (Rs 204.13 billion) during September 2-13, while withdrawing Rs 266 crore (Rs 2.66 billion). Market experts believe overseas investors are currently looking for triggers such as RBI's review policy that is scheduled for Friday besides the US Federal policy at the end of the month.
"Currently, foreign fund houses have poured in Rs 2,000 crore (Rs 20 billion) in the stock and bonds together ...we will see an additional investment of about Rs 3,000-4,000 crore (Rs 30-40 billion) which will take the overall net inflows to 5,000-6,000 crore (Rs 50-60 billion) at the end of September," Ostwal added.
So far this year, FIIs have pumped in Rs 21,306 crore or USD 4.78 billion into the stock and bond markets, compared to about Rs 1,79,674 crore (Rs 1796.74 billion) in the whole of 2010.
The number of FIIs registered with Sebi stood at 1,736 as on September this year.
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Analysts expect FII investments to reach Rs 5,000 to 6,000 crore (Rs 50 to 60 billion) in the Indian equity and bond market by the end of September.