Foreign investors have poured in a whopping Rs. 9,600 crore in the stock market so far this month, mainly on the hopes of a stable government in general elections starting next month.
Foreign Institutional Investors bought shares worth Rs. 59,296 crore and sold stocks to the tune of Rs. 49,699 crore till March 21, resulting in a net inflow of Rs. 9,597 crore (USD 1.56 billion), according to the Securities and Exchange Board of India data.
FIIs also infused Rs. 12,816 crore (USD 2 billion) in the debt market during the period.
According to market analysts, there has been some narrowing in the country’s Current Account deficit and a stability in the rupee value against the US dollar, but focus has shifted to the upcoming Lok Sabha elections.
They said FIIs are betting on Bharatiya Janata Party-led government, headed by Narendra Modi, at the Centre.
Meanwhile, Finance Minister P Chidambaram said earlier this month that both current account and fiscal deficits are under control and the economy is more stable than it was 18 months ago.
That apart, marketmen said foreign investors have sidelined their concerns of further tapering by the US Federal Reserve.
FIIs, the major drivers of the Indian stock market, have helped push the benchmark BSE Sensex almost 635 points, or 3 per cent so far this month.
Overseas investors have purchased a net Rs. 11,716 crore worth of stocks so far in 2014. They had invested a net Rs. 1,404 crore in equities in February, and Rs. 714 crore in stocks in January.
As of March 21, there were 1,715 registered FIIs in the country and 6,318 sub-accounts.