According to data available with the Securities and Exchange Board of India (SEBI), foreign institutional investors (FIIs) have brought in about $6.4 billion till Oct 29 -- the last trading day of the month.
This is the biggest amount of foreign money to have ever come in a single month. In fact, FIIs have been net buyers on every trading day since Aug 30 till Oct 29 when they sold
stocks worth $125.35 million.
Till date, FII inflows in 2010 have touched $24.79 billion, fuelling to a large extent an almost 15 percent rally in the 30-scrip sensitive index (Sensex) of the Bombay Stock Exchange, which ended Friday at 20,032.34 points.
The Sensex had closed Dec 31 at 17,464.81 points. The equities markets had a dream run with this inflows and analysts are predicting that the Sensex is poised to break its all time high of over 21,000 points achieved in January 2008 as soon as on Diwali (Nov 5).
Also, expectations of a healthy listing by state-run Coal India, which has just finished a $3.5 billion initial public offering, and robust results posted by Reliance Industries will help spur another rally.
The only concern for some is that the Reserve Bank of India is set to undertake its quarterly review of the monetary policy and all eyes will be if Governor D.Subbarao initiates another interest rate hike.
FIIs had pumped in a record $17.45 billion into the equities market in 2009, but started exiting in early 2010. In January, they were net sellers to the tune of $94.48 million.
But from February, the scenario changed with foreign funds buying scrips worth $269 million in the month. In March, it was over $4.3 billion and in April the net buys were over $2 billion.
May, however, saw a huge sell-out, with FIIs dumping stocks worth $2.1 billion.
The buying has been fairly consistent since, with FIIs lapping up stocks worth $2.27 billion in June, $3.5 billion in July and $2.4 billion in August.