• OUTLOOK ARENA
  • VIEWS ON NEWS
  • AUGUST 25, 2000

FIIs: Back with a vengeance...

August has marked a change in sentiment as far as FII investment in domestic markets is concerned. Not surprisingly mutual funds too have turned net buyers. The markets, as a result, are looking up.

Let's take a look at the FII numbers over the last four months or so. After having seen buoyant investment activity in April, net investments dropped to a paltry Rs 2.6 bn in May. Both June and July witnessed a sharp reversal of trend with FIIs pulling out Rs 9.6 bn and Rs 14.2 bn. Consequently the markets too sank from their highs to sub 4,000 levels. August, however, has once again seen a reversal in trend. So far this month FIIs have pumped in Rs 15 bn in the markets. Not surprisingly the markets are looking up.

Mutual funds too have shown a similar trend in the over the corresponding period. After having been sellers in June and July, they have turned net buyers on the bourses. Infact, during August, they have invested Rs 1.6 bn.

The markets in turn have responded to the inflow of funds. The BSE 30 has gained 4%, despite the rising volatility in forex markets, and the subsequent rate hike announced by the RBI.

As it seems now, the sentiment is bullish and if this level of FII and mutual fund investment activity sustains (where are the momentum investors?!), the markets could continue 'inch' up. However there are some key concerns that the market could be faced with in the near future. First is the likelihood of a fuel price hike. And the other concern pertains to the possibility of an escalation of violence in Kashmir. And let's not forget that a persistent dithering of the government on the disinvestment issue will adversely affect sentiment.

Copyright © Equitymaster Agora Research Private Limited. All rights reserved.
Any act of copying, reproducing or distributing this newsletter whether wholly or in part, for any purpose without the permission of Equitymaster is strictly prohibited and shall be deemed to be copyright infringement.

LEGAL DISCLAIMER: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research Company. Equitymaster is not an Investment Adviser. Information herein should be regarded as a resource only and should be used at one's own risk. This is not an offer to sell or solicitation to buy any securities and Equitymaster will not be liable for any losses incurred or investment(s) made or decisions taken/or not taken based on the information provided herein. Information contained herein does not constitute investment advice or a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual subscribers. Before acting on any recommendation, subscribers should consider whether it is suitable for their particular circumstances and, if necessary, seek an independent professional advice. This is not directed for access or use by anyone in a country, especially, USA, Canada or the European Union countries, where such use or access is unlawful or which may subject Equitymaster or its affiliates to any registration or licensing requirement. All content and information is provided on an 'As Is' basis by Equitymaster. Information herein is believed to be reliable but Equitymaster does not warrant its completeness or accuracy and expressly disclaims all warranties and conditions of any kind, whether express or implied. Equitymaster may hold shares in the company/ies discussed herein. As a condition to accessing Equitymaster content and website, you agree to our Terms and Conditions of Use, available here. The performance data quoted represents past performance and does not guarantee future results.

SEBI (Research Analysts) Regulations 2014, Registration No. INH000000537.

Equitymaster Agora Research Private Limited (Research Analyst)
103, Regent Chambers, Above Status Restaurant, Nariman Point, Mumbai - 400 021. India.
Telephone: +91-22-61434055. Fax: +91-22-22028550. Email: info@equitymaster.com. Website: www.equitymaster.com. CIN:U74999MH2007PTC175407