FIIs infuse Rs 79,854 crore in Nov-Dec, inflows approach record high of 2019

Foreign institutional investors (FIIs) have infused a record Rs 79,854 crore in the last two months of 2020. With eight trading sessions left in 2020, the investment is likely to cross Rs 1 lakh crore during the period. That would bring the fund infusion at par with 2019 when they poured in Rs 1 lakh crore into Indian equities.  That was second highest infusion by FIIs ever compared to an all-time high of Rs 1.13 lakh crore in 2013.

The inflow of funds has risen after the end of election in the United States and weakness in the dollar index. The end of uncertainty post the result of US Presidential elections seems to attract foreign funds into the Indian market.  Strong corporate earnings at home also raised sentiment on Dalal Street.

Apart from index related flows, hopes for a successful coronavirus vaccine lifted expectations of a swift reopening of the global economy, which would help the resumption of business activities, and better than expected quarterly results have enthused foreign investors.

With markets hitting all-time highs in almost every session of November and December, analysts are bullish on the benchmark indices going ahead.

S Ranganathan, Head of Research at LKP Securities, "While the week gone by quite clearly belonged to the real estate stocks, we expect the pharma and the IT sector to continue their upward journey during the coming week."

Sensex ends at record high, Nifty at 13,760; TCS, SBI, Nestle, Titan top gainers

Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said, "Going ahead, the market may continue with its positive biasedness on the back of abundant liquidity, effective vaccine rollout and increasing prospects of Brexit deal and US stimulus. Technically too, Nifty formed a small Bullish candle on daily scale while making higher high - higher lows on lower time frame. Now, it has to continue to hold above 13,600 to witness an upmove towards 13850-14000 while the support exists at 13500. Lower levels of volatility suggest that Bulls are holding the tight grip and any small decline could be bought in the market"

However, for 2020, the FIIs inflows into the capital market stand at meager Rs 17,022 crore till date.  The figure is nearly one fourth of fund inflows last year as coronavirus crisis hit the equity market in March-end. In the same month, FIIs sold securities worth Rs 65,816 crore in equities with market sentiment hitting an all-time low.