The Foreign Institutional Investors (FIIs) are figured to have made a net inflow of over Rs. 1.13 lakh crore in the Indian equity market in 2013. At gross level, FIIs purchased stocks worth Rs 7.96 lakh crore in 2013 and sold equities to the tune of Rs 6.84 lakh crore; translating into a net inflow of Rs 1,13,136 crore.
Nevertheless, overseas investors pulled out Rs 50,847 crore from the bond market in 2013. This takes the overall investment by FIIs into the debt and equity market together to Rs 62,288 crore. Despite their unpredictable ‘hot money’ investment, these overseas entities are amongst the most important drivers of Indian stock markets.
As per the experts, FIIs are looking forward to a stable government that can move reforms process faster, irrespective of which political party comes to power at the Centre next year. Likewise, a strong performance by BJP in the recent assembly elections has promoted the chances of a stable government at the Centre.