FIIs Are Back With A Bang

Please forget about any doubt you may be harboring about India’s growth story. The biggest factor that could have probably led to you having such doubts has turned around. As a result, even when everybody was predicting a sharp correction, a big pull by this force had taken the markets almost to a new high. This is the kind of spell that the FIIs are capable of casting on the markets. Over the last fortnight they have pumped in Rs 4835 crore into Indian stock markets.

This action of the FIIs has somewhat neutralised the selling pressure exerted by the Indian Mutual Funds and the markets have managed to retain strategic levels. On October 3, the BSE Sensex opened at 19585 points and gathered momentum in the succeeding days to touch a peak of 20759 points on October 15. In fact, the markets never showed any kind of weakness throughout the fortnight and closed at 20547 points on October 15. It gained a good 961 points during the fortnight. The best part was that, it was at its lowest level of 19583 points at the start of the fortnight. The Nifty too opened at 5819 and tumbled to 5802 points on the same day but never looked back. It touched its highest point of 6156 points on October 15 before closing at 6089 points, gaining 269 points during the last 15 days.

FIIs stood to be the highlight of the markets over the past fortnight. Between October 3, and October 15 they were consistent buyers in equities. On the other hand, Indian mutual funds were seen to be getting jittery about the markets and remained net sellers, with sales aggregating to Rs 153 crore.

On the international front, the US Dow showed a mild appreciation of just 1.15 per cent. Quite similar to Indian markets all most all the indices showed some kind of appreciation during the fortnight with Brazil’s Bovespa topped the list emerging the biggest gainer on the chart with a 2.02 per cent rise. It was followed by Japan’s Nikkei, China’s Shanghai Composite, UK’s FTSE and South Korea’s Seoul Composite with 1.87, 1.60, 1.09 and 1.02 per cent respectively.

Individually, out of the total listed stocks, 1213 stocks appreciated, while 1508 depreciated over the last fortnight. 31 stocks remained unchanged. On the gainers list was MCX, the biggest gainer with a 27.73 per cent rise followed by Karnataka Bank, Tech Mahindra, Jaiprakash Associates and JP Hydro which rose 19.83, 19.48, 18.97 and 18.44 per cent respectively. On the other hand NHPC was the biggest loser with a 6.21 per cent decline followed by Jain irrigation, Jet Airways, Shriram City and Coal India that declined 5.41, 5.37, 5.11 and 4.55 per cent respectively.

Looking at the present scenario it seems that despite the confidence that FIIs are showing in the markets, it seems to be vulnerable and could come down a bit. The best strategy for an investor would be to book part profit on whatever gains they have accumulated and sit on cash.