FII selling-spree intensifies

FII selling-spree intensifies
ENS ECONOMIC BUREAU

MUMBAI, JULY 18: Foreign institutional investors (FIIs) pulled out Rs 460 crore on Monday from the Indian stock market, which is the highest single day net sales in recent times. The huge outflow has unnerved market players who see this triggering a selling in the opening session on Wednesday.

It has taken some aggressive selling in pivotals on the part of foreign institutional investors and select mutual funds to alert operators who have wasted no time in keeping their outstanding positions in check by not allowing their commitments to overshoot levels of about Rs 3000 crore on BSE.

With Monday's Rs 460 crore ($ 103 million) sale, FIIs have since June to date pulled out a whopping $ 402 million or Rs 1800 crore from the Indian stock markets. Mutual funds too have been net sellers in equities. Domestic mutual funds have sold net of purchases Rs 795 crore since the beginning of June todate.

The twin effect of domestic and foreign funds selling selectively, but consistently has seen the market slipping into the hands of speculators, point out brokers.

Another influential section of the market feels that the new margin regime introduced in the ALBM section has made operators jittery and this has resulted in squaring up of outstanding positions on NSE which could trigger off another round of selling. The crucial support level of 4680 will be severely tested and if this level is breached there could be a "free fall".

In the last four sessions, Sensex has shed 229 points and most frontline information technology stocks showing losses of 15 to 20 per cent from their peak levels reached last week. On Tuesday, Sensex was down by 12 points.

FDI inflows up: Foreign direct investment inflow into the country grew by over 23 per cent in the first five months of 2000 to $1.73 billion as against $1.4 billion in the corresponding period the previous year.

The realisation rate of FDI inflows vis-a-vis approvals during January-May 2000 is as high as 91.42 per cent as against 41.93 per cent during the sameperiod in the previous year.

In rupee terms, the amount of FDI inflows during January-May 2000 is valued at Rs 7,442.7 crore as against Rs 5,942.6 crore during the corresponding period the previous year.

The month-wise comparative data of FDI inflow during the current year (January-May) has also shown a consistent rise. The inflows increased from alevel of $1.23 billion in January to $4.86 billion and $4.92 billion duringApril and May respectively.

With this increase in actual inflows, the gap between FDI approvals andinflows has narrowed down appreciably. FDI approvals during January to May 2000 are valued at $1.8 billion. In terms of rupees, FDI approvals during this period amounted to Rs 8,140.8 crore, according to an official release.