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Business News/ Market / Mark-to-market/  Domestic institutional investors’ net purchases in April highest in past 63 months
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Domestic institutional investors’ net purchases in April highest in past 63 months

Domestic institutional investors bought a net `11,511 crore worth of equities last month

With reports that the Employees’ Provident Fund Organisation is going to start investing 5-15% of its incremental funds in stocks from next month, local purchases of equities are likely to continue to provide succour to the market. Photo: MintPremium
With reports that the Employees’ Provident Fund Organisation is going to start investing 5-15% of its incremental funds in stocks from next month, local purchases of equities are likely to continue to provide succour to the market. Photo: Mint

The BSE Sensex has declined 10% from its record high on 29 January, but the drop would have been even greater had the domestic institutions not supported the market.

As the chart shows, domestic institutional investors (DIIs) bought a net 11,511 crore worth of equities last month.

That is the highest amount since January 2010.

Note that DIIs have been net sellers of equities in most months and they have been net buyers only in the last few months. On the other hand, foreign portfolio investors sold a nominal amount last month, the first net sales by them in the last 12 months.

With reports that the Employees’ Provident Fund Organisation is going to start investing 5-15% of its incremental funds in stocks from next month, local purchases of equities are likely to continue to provide succour to the market.

That should be a counterweight to foreign investors, who have been booking profits. Several reasons have been given for the sell-off, including investors’ disenchantment with the minimum alternate tax demands, earnings which have failed to accelerate and the realization that reforms are easier said than done.

In dollar terms, the MSCI India index has dropped 6.5% last month. Returns from the Indonesian and the Philippine markets, too, were negative in April as investors rotated funds out of these markets to feed the China bull.

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Published: 03 May 2015, 09:42 PM IST
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