Net FII investments in April amounted to a whopping $201.8 million or Rs 856.8 crore. This is the highest net FII investment recorded in the country in the last 20 months. FIIs, who are generally perceived to press the panic button even at the slightest hint of uncertainty, turned contrarians during April, a period of fast-paced political change leading to mid-term elections.

During April, FIIs bought shares worth Rs 2,221 crore and sold shares worth Rs 1,434 crore. The net investments in equity shares amounted to Rs 787 crore and debt instruments accounted for around Rs 70 crore. And, the mood continues to be upbeat with a cautious note in the short-term.

FII sources whoconsider the rising inflows as a reflection of the general flow of funds into emerging markets in Asia expect a slowdown in investments due to the current uncertainty. ``However, the uncertainty is in the short-term and the outlook is positive in the medium-term,'' FII circles said. ``FIIs have taken a contrarion view and the inflows have been driven by low prices,'' said another FII source. The correction resulting from the political developments has offered the FIIs a good opportunity to buy and ``there is not much of earnings risk''. The sustainability of the flow depends on the formation of a ``stable coalition''.

The view that the risks in the Indian markets are limited has been backed by the international rating agencies maintaining their rating outlook of the country. Standard and Poor's and Moody's Investor Services had pointed out soon after the fall of the government that the political uncertainty has been factored into the rating and the situation did not warrant a downgrade of thecountry.

NSE stocks rise further

MUMBAI: The National Stock Exchange (NSE) continued its uptrend as prices of pivotals improved smartly on buying support from foreign institutional investors (FIIs) coupled with value picking by institutional investors on Friday. The country's premier stock exchange Bombay Stock Exchange (BSE) was closed on account of `Buddhapurnima'.

Reflecting the uptrend, the S&P CNX Nifty index appreciated by 11.60 points to close at 978.20 points from its previous close of 966.60 points. The total turnover on the NSE was pegged at Rs 15.59 crore, with 5.88 crore shares in 2,29,121 trades, the debenture traded value was Rs 29.65 lakh. The advances to decline ratio stood at 654 securities advanced and 289 securities declined with 74 securities remaining unchanged. Almost 69 securities have hit the upper circuit reflecting a firm and bullish undertone.

"The markets improved on the back of cautious buying by foreign institutional investors (FIIs) which led to a firmer undertoneand saw the Nifty Index improve by 1.2 per cent. Largely, the pivotals were firm and the software and pharmaceutical stocks which had been underperforming gained today. This also indicates that FII buying continues," said a broker.