Indian equities were a favourite bet for foreign funds in 2010, with overseas investors infusing over Rs 1.12 lakh crore into the domestic share market during the year, the Economic Survey said on Friday.
"The year 2010 has been one of strong growth for the Indian capital markets. Bulls tossed off the markets in the year 2010... following global recovery and with FIIs pumping money into the market," the Economic Survey said.
Foreign institutional investors (FIIs) made gross purchases of equities worth Rs 6.03 lakh crore in 2010 and gross sales worth Rs 4.90 lakh crore, translating into a net purchase of Rs 1,12,622 crore (Rs 1,126.22 billion) at the end of the year.
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FIIs invested Rs 1.12 lakh cr in 2010
The Survey said the 18 per cent rise of the equity market during 2010 was helped by the inflow of funds from overseas investors.
The Indian market registered gains for eight consecutive quarters up to December, 2010, its longest winning run in 20 years.
"While 2009 was basically a year of recovery from the crisis of 2008, 2010 was one of consolidation of gains," the Survey said.
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FIIs invested Rs 1.12 lakh cr in 2010
Photographs: Arko Datta/Reuters
It said that FIIs turned bullish on Indian equities on seeing the prospects of solid domestic growth, coupled with the resurgent corporate sector.
"Historically low yields in developed markets due to accommodative monetary policies and weak economic prospects have pushed FII inflows to emerging markets to record highs," the Survey noted.
However, FIIs total investment in debt and equity has come down to Rs 1.37 lakh crore so far in the current fiscal from Rs 1.42 lakh crore in 2009-10.
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