Due to the global recession, Indian stock market suffered huge losses. Investors have lost their confidence in the market and pulled back their investments from the market. But the scenario is changed; now institutional investors (FIIs) are willing to invest in Indian stock market again.
The political stability in India resulted good time for the Indian stock market, which was in red for last many months. Elections over and UPA Govt from for the second time and investors have faith over the stable government. The stock market has been singing and seems that FII will back to the stock market.
In 2008, FIIs had pulled out around Rs 52,987 crore from the Indian stock market; with this the market plunged by 51 per cent. Now FIIs would return to invest in the Indian stock market, as it would be a favorable time in India to invest despite the global recession.
According to the latest date available with the Securities and Exchange Board of Indian, overseas investors have put in Rs 15, 638.10 crore, that is about one third of last year’s outflows so far in 2009.
The purchase and sell of the shares by FIIs in Indian maker will have impact on the stock market and indices. The global clues are the major factors that decide the move of the FIIs in Indian stock market.
In May alone, FIIs made gross purchase of equities worth Rs 55,001.10 crore and sold shares of Rs 39,719.30 crore, resulting in a net investment of Rs 15,281.60 crore. In 2007, FIIs had invested 11 billion dollar in Indian stock market. The global recession has huge impact on the inflow of funds from FIIs in Indian stock market.
The stable government at the centre and key person with key portfolio would gain the confidence of the FIIs and domestic investors. It is expected that despite the global recession, Indian stock market will shine in the day to come.
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