Straight from the Specialists
(Any opinions expressed here are those of the author and not of Thomson Reuters)
The Indian stock market is in a tizzy as foreign institutional investors (FIIs) seem to have pressed the sale button. Securities and Exchange Board of India (SEBI) data shows that while there was a considerable slowdown in FII inflow in March, we are seeing an outflow in April.
While net FII inflow in the equity markets remained above $4 billion for each month between December 2012 and February 2013, the net inflow for March was reduced to $1.68 billion. The trend reversed and during April 3-10, there was a net outflow every day, with cumulative outflow of $269 million during this period.
The outflow in April is small as compared to the over $25 billion inflow during 2012-13, but the trend is unmistakable. The euphoria that was generated after the government announced a series of policy measures (touted as big-ticket reforms) from September 2012 onwards has slowly died down as the magnitude of triple deficit (fiscal deficit, current account deficit and governance deficit) intensified. Hardly any of the announcements bore fruit.
There’s still no light at the end of the tunnel for the land acquisition bill. FDI in multi-brand retail is still not a foregone conclusion and may yet face a roadblock when the budget session of parliament reconvenes.