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Foreign Funds Sell Net 7.56 Billion Rupees of Indian Equities

Overseas investors sold a net 7.56 billion rupees ($147.1 million) of Indian stocks on Nov. 18, paring their investment in the equities this year to 19.9 billion rupees, the nation’s market regulator said.

Foreigners bought 18 billion rupees of shares and sold 25.5 billion rupees, the Securities and Exchange Board of India said today. They sold a net 2.26 million rupees of bonds, reducing their flows into debt this year to 202.4 billion rupees.

The BSE India Sensitive Index has dropped 22 percent, the most in Asia this year, on concern a slowdown in the U.S. and Europe’s debt crisis may erode company profits already threatened by the most aggressive interest-rate increases among major Asian economies.

Overseas funds withdrew a net $2.4 billion from Indian stocks in August, the most since October 2008, the data show. That caused the Sensex to drop 8.4 percent that month, making it the gauge’s worst August in at least a decade, according to Bloomberg data.

India’s $1.2 trillion stock market, Asia’s fourth-biggest, is influenced by foreign fund flows. Inflows from abroad surged to a record $29.4 billion in 2010, making the Sensex the best performer among the world’s top 10 markets. The largest-ever outflow in 2008 led the biggest annual slump of 52 percent.

Foreign funds have placed 4.491 trillion rupees in stocks and 989.1 billion rupees in bonds since they were allowed into the country in 1993.

The regulator provides data on shares bought and sold by large investors, including trades in the primary and secondary markets, with a delay of at least a day.

To contact the reporter on this story: Paresh Jatakia in Mumbai at pareshj@bloomberg.net

To contact the editor responsible for this story: Arijit Ghosh at aghosh@bloomberg.net

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