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Sharwari Patwa

Mumbai, Nov. 20 The assets under management of foreign institutional investors fell for the first time in the past eight months in October, as the equity markets fell on the back of weak corporate results.

The AUMs of FIIs have fell by four per cent to Rs 7,55,444 crore in October from Rs 7,86,852 crore in September, according to the data released by SEBI.

The benchmark Sensex fell by over seven per cent during the same time period.

FIIs were net buyers of equity for Rs 9,077 crore in October, while they had been net buyers for more than double that amount (Rs 18,344 crore) in September. FIIs had purchased equity worth Rs 70,130 crore and sold for Rs 61,052 crore, according to SEBI Web site. Their gross purchases and sales were lower in September.

Although FIIs might have reduced their buying activity in October, foreign inflows have still remained robust, said market men.

According to Manish Sonthalia, fund manager, Motilal Oswal, FIIs are entering the Indian market in large numbers and largely through exchange traded funds, which are a passive investments and of longer duration.

“FII had been big buyers in October also and in fact the market correction has taken away some value from their buys to that extent,” said Mr Sonthalia.

There is a direct correlation to the fall in the AUM of FIIs and the fall in the market, said Mr Arun Kejriwal of Kejriwal Research & Information Services (KRIS).

FIIs are behaving like typical investor – pulling out when the markets are falling and preferring to come in when equities are on the rise, he said.

Also with the calendar year coming to an end, some FIIs might prefer to liquidate their holdings in some stocks and go home for the holidays, said Mr Kejriwal. Usually they only get bonuses on booked profits, and this might be one reason for the selling pressure, he added.

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