Foreign Funds Turn Net Sellers of Indian Stocks After 17-Day Buying Spree

Foreign funds withdrew 5.43 billion rupees ($111 million) of Indian equities yesterday, turning net sellers of domestic stocks for the first time in 18 days, data from the nation’s regulator show.

Foreigners bought 30.8 billion rupees of shares and sold 36.2 billion rupees, the Securities & Exchange Board of India said on its website today. The outflow led to the benchmark BSE India Sensitive Index falling 2.7 percent on Feb. 27, the most in Asia and the fourth straight day of losses.

Offshore funds have bought a net 347.1 billion rupees of equities this year, helping the Sensex to a 15 percent gain in the period. They were net buyers for 17 straight days before yesterday, the longest such stretch since October 2010, data compiled by Bloomberg show.

Foreigners bought 25 billion rupees of bonds, taking total inflow into debt this year to 235.2 billion rupees, data from the regulator show. They invested 421 billion rupees in bonds last year. They have invested 4.791 trillion rupees in stocks and 1.443 trillion rupees in bonds since they were allowed into the country in 1993.

India’s $1.3 trillion stock market, Asia’s fifth-biggest, is influenced by flows from overseas. Inflows from abroad rose 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.

Offshore funds pulled out 27.1 billion rupees from local equities last year, compared with record flows of 1.33 trillion rupees in 2010, as Europe’s debt crisis threatened the global economy and cooled demand for emerging-market assets. That led to a 25 percent drop in the Sensex, the second worst annual loss, and sent the rupee to an all-time low.

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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