FIIs withdraw Rs 2,000 crore from Indian equities in a fortnight

Foreign institutional investors (FIIs) pulled out over Rs 2,000 crore from Indian equities in a fortnight following a further reduction in the bond buying programme by the Federal Reserve.

Thus, overseas investors also turned net sellers of equities so far this year. After buying over Rs 1.23 lakh crore ($20 billion) worth of stocks in 2013, they have sold equities totalling Rs 1,298 crore since January.

FIIs were gross buyers of equities worth Rs 25,573 crore and sellers of stocks to the tune of Rs 27,586 crore till February 14, resulting in net outflow of Rs 2,012 crore ($322 million), according to data from 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 central bank.

Starting January, the 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 7,372 crore in the debt market this month so far. With the latest pull-out, FIIs investment in bonds stood at Rs 801 crore since the beginning of 2014.

In 2013, overseas investors infused a net amount of Rs 1.13 lakh crore ($20.10 billion) in equities, while they pulled out a net of Rs 50,847 crore ($8 billion) from the bond market.

As of February 14, the number of registered FIIs in the country stood at 1,727 and the total number of sub-accounts was at 6,380.