Jan 4, 2000|
FIIs were big buyers in December 1999
The foreign institutional investors (FIIs) were big buyers in the month of December. This is borne out by the fact that net FII investments in India topped US$ 372 m (Source: Sebi) during this month as compared to US$ 283 m in November and a net outflow in the month of October.
The pick up in FII investments will come as positive news both for the stock markets as well as the forex markets.
The stock market players are likely to be taken by surprise by these numbers as leading foreign funds had let it known that they had instructions to avoid investing in markets like India in the latter half of December. In view of this a lot of pessimism had been generated for the near term. However, FIIs seem to have been quietly investing in the markets. The underlying buoyancy is borne out by the fact that the BSE Sensex actually rose by 8.3% in December. The after-effects of this buying spree are evident in the stupendous rise that the markets witnessed when the BSE Sensex gained 7.3% in a single day.
The forex markets on the other hand will be relieved by the inflow of foreign funds into the country. This will help reduce the downward pressure on the Indian Rupee (created by the trade deficit). Infact, the six-month forward premia on the Indian Rupee declined by 15 paise yesterday in view of the optimism regarding fresh inflow of funds into the country.
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