FIIs withdraw Rs 20b from Indian equities

NEW DELHI, Feb 16 (PTI): Overseas investors pulled out more than Rs 20 billion from Indian equities in a fortnight following a further reduction in the bond buying programme by the US Federal Reserve.

Thus, foreign institutional investors (FIIs) also turned net sellers of equities this year. After buying $20 billion (over Rs 1.23 trillion) worth of stocks in 2013, they have sold equities totalling Rs 12.98 billion since January.

FIIs were gross buyers of equities worth Rs 255.73 billion and sellers of stocks to the tune of Rs 275.86 billion till February 14, resulting in net outflow of Rs 20.12 billion ($322 million), according to the data of market regulator Securities and Exchange Board of India (Sebi).

Market experts attributed the sell-off by FIIs to global events like further scaling down of the economic stimulus programme for the American economy by the US Federal Reserve.

Starting January, the US Fed cut bond purchases to $75 billion from $85 billion. Earlier this month, it decided to cut it by another $10 billion.

Experts also said that the market would not witness strong inflows till the general elections, scheduled for May, are completed in India and the further pumping in of money by FIIs would depend on the formation of the new government.

However, overseas investors have pumped in Rs 73.72 billion in the debt market this month so far. With the latest pull-out, FIIs investment in bonds stood at Rs 8.01 billion since the beginning of 2014.