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Market Analysis

FIIs make net sales of Rs 13,036 cr in Jan (Business Standard 1st Feb 2008)
Foreign institutional investors (FII) sold record net holdings of Rs 13,036 crore ($3.23 billion) in January, according to Sebi data.
This is the highest net sales by FIIs in single month ever since they entered the Indian markets. In August 2007, FIIs sold Rs 7,771 crore ($1.92 billion) worth of equity shares.
However, dwarfing the figure compiled by the Securities and Exchange Board of India (Sebi), the FII outflow in January 2008 was a mindboggling Rs 29,477 crore, according to provisional data provided by BSE and NSE.
The Sebi data includes FII buying in primary and secondary markets, while the data from the exchanges is based on trading in the secondary market only. With FIIs pulling out of money, the benchmark indices, the Sensex and Nifty, have crashed.
The BSE Sensex slumped 2,638.28 points this month, its largest ever fall in a month. The index has declined 13 per cent since December 31, 2007 (20,286.99) to close at 17,648.71 on Thursday (January 31). More
Sensex has worst start in 28 yrs(Business Standard 1st Feb 2008)
India’s Sensitive Index fell in January, its worst start in at least 28 years, on concerns of a possible recession in the US and as investors sold shares on the last day of the settlement of derivatives contracts. ICICI Bank led declines.
The Sensex dropped 13 per cent this month, it’s biggest monthly drop since May 2006, on concern a recession in the world’s biggest economy will slow growth in Asia.
Exacerbating the sell-off was the flight of foreign capital, with almost $3.3 billion of Indian equities sold in January, the most in a month since at least 1997, according to data compiled by Bloomberg.
“The fall is more related to the expiry of monthly derivatives contracts because the rollovers have been weak,” said Jayesh Shroff, who helps manage $7.6 billion of assets at SBI Funds Management in Mumbai.
“I don’t think sales by foreign investors are India-specific only. It is a global phenomena and it will play itself out in the market.” More

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