Indian Institutional Funds bought 60% of FII sales

Domestic institutions such as insurance companies and mutual funds are playing the role of market saviours at a time when foreign institutional investors are selling heavily.

Secondary market operations data (for the Bombay Stock Exchange and the National Stock Exchange combined) show net sales by FIIs since July 26, when the markets started falling, stood at Rs 7,733.82 crore (Rs 77.34 billion).

Domestic institutions, on the other hand, bought shares worth Rs 4,542.95 crore (Rs 45.43 billion), which means they absorbed 60 per cent of FII sales.

In the last three months, domestic institutions have been placing big orders in the secondary market while FIIs continued to sell to cover for losses as a result of exposures in the US sub-prime mortgage market. It was only in July that FIIs bought around Rs 10,000 crore (Rs 100 billion) worth of stocks before starting to offload from July 27.

In June this year, domestic institutional purchases were the highest this financial year at Rs 4,560 crore (Rs 45.6 billion). But they neared that figure in just 13 trading sessions since July 26 as reported on Business standard.

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