Overseas funds pulled out $512 million from local stocks last year, versus a record inflow of $29.4 billion in 2010, as Europe’s debt crisis threatened the global economy and cooled demand for emerging-market assets. The withdrawals led to a 25 percent decline in the BSE India Sensitive Index (SENSEX) 2011, the second worst annual loss, and sent the rupee to an all-time low.
India’s $1 trillion stock market, Asia’s fifth-biggest, is influenced by foreign fund flows. Inflows from abroad surged to a record 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 (FIINFIIN) have placed 4.443 trillion rupees in stocks and 1.21 trillion 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.
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