The country has gained a fourth of what had flown out of foreign portfolion investments in the last calendar. Over Rs 1900 crore had flown out of the Indian stock markets following the nuclear tests last May. After a series of negative news (both domestic and international) triggering the outflow, 1999 has begun a positive and steady note.

It has been a welcome break for the Indian stock markets with the sensex struggling to cross the 3000 mark for almost seven months. Thanks to the return of the FIIs, the Sensex had soared past the 3,500 mark within the first ten days of the month. The sensex had gained nearly 300 points in four trading sessionsthree days (between January 6 and January 11) following a net FII investment of over Rs 200 crore. In spite of profit booking by domestic institutions that followed the 3500-level, the index continues to hold around the 3300 level. This is because of the resurgence in the FII investments in the last one week.

Although market sources point out that most of the FII purchases were confined to the pharmaceuticals, FMCG and software sectors, the rise in these stocks is not reflected in the indices. However, the fact that the FIIs are coming back in a big way, has helped hold the positive sentiment in the market. The market continues to be driven and controlled by FII inflows. The Sebi has decided to release the FII figures on a daily basis. The regulator till recently used to release these figures once a week. However, there were discrepancies in the figures released by the stock exchanges and those of Sebi. As a result, Sebi has decided to release the figures every day.

The FII inflow has been confinedlargely to equities, suggesting that they are turning bullish on India. The investments in debt segments is Rs 6 crore. The total FII investments in the equity segment was Rs 489.5 crore. Of the 18 trading sessions so far, only five sessions witnessed a net FII outflow of around Rs 95 crore. The highest net FII investment figure of Rs 230 crore was on January 11, which propelled the sensex to a high of 3500 before closing the day at 3433.