FIIs buy up Indian stocks as domestic institutions turn net sellers

Overseas investors have been making consistent purchases in the Indian stock markets even as domestic institutional investors have turned net sellers.

Foreign Institutional investors have made net purchases to the tune of Rs6,508 crore ($1.3 billion) in April - the highest since October 2007 -  according to the Securities & Exchange Board of India (Sebi).

Domestic institutions, on the other hand, have been net sellers to the tune of Rs782 crore, the SEBI data showed. FIs are seen to be booking profits and analysts expect them to re-enter the markets at lower levels.

FIIs, meanwhile, are reported to have diluted their positions in the banking and telecom sector while the domestic insurance companies actually increased their positions in these sectors.

While mutual funds bought into consumer sectors the insurance companies preferred to be net sellers in this sector.

FIIs are expected to ramp up their investments in Indian stocks significantly in the coming days, according to analysts.

As of now, about 40 blue chip stocks, including Reliance Industries, Infosys and Bharti Airtel, account for around 80 per cent of the entire FII portfolio in India.

Retail investors and small-time traders which had turned away from equity market are also reported to be back in the market now.

The BSE Sensex gained as much as 731 points to close above the 12,000-level with metal and IT stocks leading the pack, according to reports.