Overseas investors bought a net 11 billion rupees ($226.9 million) of Indian equities yesterday, raising their investment in the equities this year to 173.1 billion rupees, according to the nation’s market regulator.
Foreigners bought 35.1 billion rupees of shares and sold 24.1 billion rupees, the Securities & Exchange Board of India said on its website today. They sold a net 1.33 billion rupees of bonds, paring total inflow into debt this year to 161.7 billion rupees, the data show.
The flows helped the benchmark BSE India Sensitive Index post its best January gain since 1994 and fueled the rupee’s record monthly advance. They invested 421 billion rupees in bonds last year.
Foreigners have invested 4.617 trillion rupees in stocks and 1.369 trillion rupees in bonds since they were allowed into the country in 1993. Investments in debt increased after Prime Minister Manmohan Singh’s government raised the cap on foreign ownership of local currency bonds by 20 percent to $60 billion in November to stem a slide in the rupee. The currency tumbled 16 percent in 2011, Asia’s worst performer.
India’s $1.2 trillion stock market, Asia’s fifth-biggest, is influenced by flows from overseas. 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.
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 BSE India Sensitive Index, 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.