FII’s not responsible for the fall this time

by khalid on 16/10/2011 · 0 comments

Every time we witness a fall in the stock markets it is the FII’s who are blamed for the same. But this time around the case is not as always suspected with the Foreign Institutional Investors. Rather the Foreign Institutional Investors had been the net buyers from the secondary markets when the markets had been tumbling. The equity markets had been in this scenario from way back in early November 2010 since when the Sensex has corrected more than 16% till now.

As per the data released by SEBI it is clear that this time around the situation is not the same with the foreign institutional investors. The FII’s have been net buyers of a total of $3 billion in the secondary markets since November 2010. The net purchase in this calendar year is more than $482 by the FII’s.

The difference in behaviour of the FII’s this time around can partially be explained by the ongoing turbulence in the European continent where many countries are on the verge of being bankrupt. Another reason is that Dollar is appearing shaky after the recent S&P downgrade, economic contraction in China, and the inflationary pressures in the emerging markets. Also lack of other lucrative opportunities could have prompted the FII’s to stay firm in investing in the region.

Bell the Bull says: The old story of the FII’s being the reason for the fall seems to be wrong this time around

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