According to daily trends of FII investment released by the Securities and Exchange Board of India (SEBI), FIIs were net sellers to the tune of Rs 200 crore during the period of August 2-17.

During the period gross purchases made by the FIIs stood at Rs 1279 crore as against their gross sales worth Rs 1479 crore, the SEBI stated. The total FII investment till August 17 for the year 1999 has gone down to Rs 5118 crore.

``The uncertainty over elections seem to be one reason for the fall in FII inflows. Another reason is that Sensex had already gone above the 4,500 level. Chances of further appreciation are less now. They would enter only when the market turns weak,'' said an analyst.

``FIIs had pulled out over $ 600 million after the nuclear explosion in May 1998. FIIs started investing heavily only in March this year. Theinflows increased after the fall of the Vajpayee government,'' FII sources said, adding, ``Portfolio inflows into the country will not cease although interruptions might occur due to political upheavals. The structural problems facing India still persist with a large current account deficit and no concrete signs of improvement in the core sector.''

``FIIs recently increased the exposure to the Indian market as Indian equity market was perceived to be fundamentally cheap. The price to earnings multiples are lower than any developed world companies and lower than many developing economies as well which is inducing FIIs to buy,'' brokers said. However, FIIs have started giving more weightage to countries like Malaysia. This means funds which would have come to India and others would be diverted to these markets.

Meanwhile, the SEBI board approved amendment of SEBI (foreign institutional investors) Regulation 1995, so as to relax the broad based criteria for registration of sub accounts from an existing levelof 50 investors to 20 investors.