Foreign investors buy net $91.8m of Indian stocks

Overseas investors bought a net 4.51 billion rupees ($91.8 million) of Indian equities yesterday, raising their investment in the equities this year to 184.5bn rupees, according to the nation’s market regulator.

Foreigners bought 44.1bn rupees of shares and sold 39.6bn rupees, the Securities & Exchange Board of India said on its website today. They bought a net 8.27bn rupees of bonds, taking total inflow into debt this year to 167.6bn rupees, the data show.

The flows helped the benchmark BSE India Sensitive Index post its best January gain since 1994 and fueled the rupee’s record monthly advance. They invested 421bn rupees in bonds last year.

Foreigners have invested 4.628 trillion rupees in stocks and 1.375trn rupees in bonds since they were allowed into the country in 1993. Investments in debt increased after Prime Minister Manmohan Singh’s government raised the cap on foreign ownership of local currency bonds by 20 percent to $60bn in November to stem a slide in the rupee. The currency tumbled 16 percent in 2011, Asia’s worst performer.

India’s $1.2trn stock market, Asia’s fifth-biggest, is influenced by flows from overseas. Inflows from abroad surged to a record in 2010, making the Sensex the best performer among the world’s top 10 markets. The largest-ever outflow in 2008 led to the biggest annual slump of 52 percent.

Offshore funds pulled out 27.1bn rupees from local equities last year, compared with record flows of 1.33trn rupees in 2010, as Europe’s debt crisis threatened the global economy and cooled demand for emerging-market assets. That led to a 25 percent drop in the BSE India Sensitive Index, the second worst annual loss, and sent the rupee to an all-time low.

The regulator provides data on shares bought and sold by large investors, including trades in the primary and secondary markets, with a delay of at least a day.