Foreign Institutional Investors (FIIs) have turned net buyers in the Indian markets in 2009.
Consistent inflows from FIIs, especially in April, have resulted in net inflows of Rs 530 crore on a year-to-date basis, according to data available with the SEBI.
FII flows turned net positive this week from being negative a week ago. April alone saw the Indian markets receive net inflows of Rs 6,682 crore from FIIs.
This influx reversed the entire outflow of Rs 6,151 crore in the three months to March 2009.
This sudden arrival of foreign funds was perhaps a key reason for the strong rally witnessed by the Sensex in the current month. Even as the Indian stock market continues to lag a number of global indices in 2009, April has a different story to tell.
The Sensex has been the top performing index among leading global indices this month, with smart returns of 17.5 per cent (in dollar terms) till date.
Sensex in the lead
This is a good 3 percentage points above the next best performing market (Indonesia) during this period.
The Sensex has outperformed major indices in the Americas, Europe and the Asia-Pacific, barring the less significant markets of Italy and Sweden.
Overall, markets in the Asia-Pacific region have turned in better returns in April on the back of increased inflow of funds. According to data provided by EPFR Global, the Asia ex-Japan equity funds alone absorbed $946 million, or a good 51 per cent, of the $1.86 billion net flows into equity funds for the week ended April 22.
Inflows into Asian markets have also received support from their strengthening currencies.
Currencies such as the rupee, won (South Korea), ringgit (Malaysia) and Thai bhat (Thailand) have all marginally strengthened against the US dollar.
The benchmark indices in these countries have as a result delivered superior returns in local currencies when compared with the dollar returns
