Fears of the Greek crisis spreading out to other countries have resulted in foreign institutional investors (FIIs) turning to net sellers from net buyers in the Indian markets.
On Wednesday, FIIs pulled out Rs 1,389 crore from the market, the highest withdrawal on a single day in three months. Over the past three trading sessions, FIIs have pulled out Rs 1,521 crore. After pumping in Rs 19,928 crore in March after the February-end Union Budget, FII inflows went down to Rs 9,361 crore in April.
“There has been a lot of uncertainty over the last one week and we don’t know if it’s the last trench of bad news or there is more to come. Until the situation is clear, investors will wait for markets to stabilise before deploying funds,” said
Dilip Kadambi, managing director, RBS Investment Banking.
FII investment has had a direct relation with market movementa in India. In March, when FIIs pumped in more than Rs 19,000 crore, the benchmark Sensex gained close to 7 per cent. However over the past four trading sessions, the Sensex has fallen by 3.3 per cent as FIIs pulled out Rs 982 crore.