MUMBAI: In the wake of General Anti Avoidance Rules (GAAR) being postponed by two years and the partial deregulation in diesel prices, the investments of the foreign institutional investors (FII) in Indian equities by far this month have managed over Rs 13,000 crore, approximately $2.5 billion.
As per the data issued by SEBI, during the period between January 1 to 18, the FIIs were gross buyers of shares of Rs 42,926 crore, while selling equities up to Rs 29,525 crore resulting into a net inflow of Rs 13,401 crore ($2.5 billion).
In 2012, FIIs had made net investment of Rs 1.28 lakh crore ($24.4 billion) in Indian equities, making it the second best year for the market after record inflow of Rs 1.33 lakh crore ($29 billion) in 2010.
The market experts have regarded the massive inflows into Indian equities to the measures adopted by the government, including the extension of the implementation of the GAAR by two years to April 1, 2016 as well as the partial deregulation in diesel prices.
The 'fiscal cliff' bill by the US Senate that defers the automatic spending cuts by two months and proposed raising of taxes on individuals earning more than $400,000 a year and households making more than $ 450,000, was also regarded as one of the reasons.
Despite this, FIIs moped up Rs 563 crore ($101 million) in the debt market this year. It makes the total investment tally into the stock and bond to Rs 12,838 crore ($2.34 billion)
The massive inflow by FIIs have raised the Sensex by 612 points, or 3.15 per cent, so far in the year to settle at above 20,000.