Overseas funds turn bearish, pull out $2.48 bn in August

August 28th, 2011 - 3:39 pm ICT by IANS  

Anna Hazare Mumbai, Aug 28 (IANS) Foreign institutional investors (FIIs) turned bearish at Indian equities markets in the week ended Friday as global economic turmoil weighed on sentiments and a stand-off between the government and activist Anna Hazare unnerved traders.

According to data available with the Securities and Exchange Board of India (SEBI), FIIs sold stocks worth $952.75 million during the week ended Aug 26, taking the total net outgo during the month to about $2.48 billion.

“For the week, markets, Indian equities have under-performed the global equities by a significant margin. While the Sensex has closed 1.8 percent down for the week, the US markets have been strong,” said Sanjeev Zarbade, vice president, private client group research, Kotak Securities.

“In general, equity sentiment has turned weak. This coupled with FII selling is resulting in the markets drifting downwards,” added Zarbade.

The 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange (BSE) slumped 1.81 percent or 292.84 points to close at 15,848.83 points, while the National Stock Exchange, the 50-scrip S&P; CNX Nifty also slumped nearly two percent during the weekly trade.

FIIs had been net buyers in July, pumping in over $1.8 billion in the equities markets, according to data available with the Securities and Exchange Board of India (SEBI).

In the past two weeks, foreign funds have been net sellers every trading day and have taken out took out about $1.17 billion from the week starting Aug 16.

The net inflows from overseas institutional buyers have now turned negative for 2011 at $40.5 million. Compare this to the record $28.83 billion overseas funds pumped into the Indian markets in 2010.

The coming week, however, is expected to bring some respite to Indian markets, influenced by the weekly gains at US bourses and after US Federal Reserve Chairman Ben Bernanke said that regulators would provide economic stimulus if needed to bring the growth momentum back on track.

Analysts said Bernanke’s comments could provide respite to bourses the world over, which have been battered after Standard & Poor’s downgraded the US sovereign debt rating.

Concerns about the economies of the US and Europe declining into another recession had also spooked investors.

–Indo-Asina News Service
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