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Thursday, December 24, 2009

FII inflows hit record Rs 80,000 cr-mark in 2009

After their flight last year, foreign institutional investors flocked back to bet on the India growth story by pouring in a record over Rs 80,000 crore in domestic equities in 2009.

The FII investment of Rs 80,500 crore in 2009 is the highest ever inflow in the country in rupee terms in a single year and comes a year after they pulled out over Rs 50,000 crore. FII inflow so far this year has broken the previous high of Rs 71,486 crore parked by foreign fund houses in domestic equities in 2007.

Market analysts believe that the FII inflow in India may continue in the next year as well, if the liquidity conditions remain strong.

"FIIs will continue to be positive on our markets and in general Indian markets will fare well in 2010," Purpleline Investment Advisors director P K Agarwal said.

Delhi-based SMC Capitals Ltd's Equity Head Jagannadham Thunuguntla echoed the view, saying, "If liquidity conditions remain strong next year, one can expect FII inflows to remain strong into India even in 2010 as well."

During a year when the stock market barometer added over 70 per cent to its valuation, foreign institutional investors (FIIs) made a net investment of whopping over Rs 80,500 crore (about 16.8 billion dollars) in the Indian share market.

The Bombay Stock Exchange's benchmark Sensex, comprising 30 bluechip stocks, has gained more than 70 per cent so far in 2009, one of the best performer among leading global bourses.

"However, if dollar-carrytrade-unwinding starts, then one can expect rush of FII outflow from the country, resulting in pressure on Indian markets," he cautioned.

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