Foreign institutional investors were net buyers of equity to the extent of Rs 895.30 crore (Rs 8.953 billion) on Monday, on top of the Rs 632 crore (Rs 6.32 billion) net purchases on Friday, bringing their net purchases in January to Rs 1,245.60 crore (Rs 12.456 billion), according to data posted on the Securities and Exchange Board of India website.
Record FII inflows in the last three days of January have helped the benchmark Bombay Stock Exchange (BSE) Sensex end January 2005 at almost the same level as at the end of December 2004.
Foreign institutional investors have made net purchases of Rs 1,726 crore (Rs 17.26 billion) in equities in the last three trading sessions of January, helping the Sensex rally 393 points in the same period.
Kashyap Pujara, assistant vice-president, Sushil Finance, said, "The markets have posted strong gains once again in the last few sessions on the back of strong FII inflows, showing the correlation of FII inflows and market movements."
FII open interest in the derivatives segment was also at near-peak levels, he added.
Deepak Chhabria, chief operating officer (institutional equity) at IL&FS Investsmart said: "The recent rally was essentially on the back of FII inflows, driven by good quarterly corporate results and buying opportunities because of the correction."
He added: "Higher FII participation in the derivatives segment, especially in options, is being seen because of the higher volatility expected around the Budget. Also, there is a lack of participation from domestic players."