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THE FII MONEY AND THE MARKET TREND

RESEARCH

THE GUSHING FII MONEY AND THE MARKET TREND

Indian Markets have been one of the most attractive investment places for the FII's. India
being a developing nation attracts the foreign flows looking at the growth potential in the
Indian Economy. The FII's contribute a major chunk of volumes on the Indian bourses and
this in turn impacts the market moves. In case of recession in the world economies, the
foreign investors look for saver bets and India with a rising GDP where other nations GDP /
Growth is shrinking has always offered greater investment avenues. Indian Markets have
been the clear outperformers vis-a-vis the global markets in the past years. This report is an
initiative to highlight the market moves and the FII flows during those periods. In our this
report we have tried to show the major turns in the Indian Stock Markets and the FII Flows
during these periods.

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 THE FII MONEY AND THE MARKET TREND

RESEARCH

COMPARATIVE TABLE OF MOVEMENT IN NIFTY AND THE FII FLOW DURING THE PERIOD MAR. 07 - DEC.07

FII Investment in
Period Monthly Nifty Close Equity Market ( Rs. Crs)

March 07 3821.55 -1082.00

April 07 4087.90 6679.20

May 07 4295.80 3959.70

June 07 4318.30 1643.10

July 07 4528.85 23872.40

August 07 4464.00 -7770.50

September 07 5021.35 16132.60

October 07 5900.65 20590.90

November 07 5762.75 -5849.90

December 07 6138.60 5579.10

TOTAL 63754.60

Looking at the above table we can see that from March 2007 to December 2007 the Nifty has surged 2317 points
(60.63%) and the FII flows during this period have also been on a constant rise. The Total FII inflow during this period
has been to the tune of Rs. Rs. 63754.600 crs.

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 THE FII MONEY AND THE MARKET TREND

RESEARCH

COMPARATIVE TABLE OF MOVEMENT IN NIFTY AND THE FII FLOW DURING THE PERIOD JAN 08 - DEC 08

FII Investment in
Period Monthly Nifty Close Equity Market ( Rs. Crs)

January 08 5137.45 -13035.70

February 08 5223.50 1733.30

March 08 4734.50 -130.40

April 08 5165.90 1074.80

May 08 4870.10 -5011.50

June 08 4040.55 -10095.80

July 08 4332.95 -1836.80

August 08 4360.00 -1211.70

September 08 3921.20 -8278.10

October 08 2885.60 -15347.30

November 08 2755.10 -2598.30

December 08 2959.15 1750.10

TOTAL -52987.40

The period of 2008 has been a period of tremor for the Indian Markets, the Indian Markets plunged after making
high of 6357 in Jan. 2008 to as low as 2252.75 in Oct. 2008. On monthly closing basis the Index lost 2187 points
(5137.45 in Jan 08 to 2959.15 in Dec. 08) , the FII have been net sellers during this period to the extent of -52987.40
crores.

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 THE FII MONEY AND THE MARKET TREND

RESEARCH

COMPARATIVE TABLE OF MOVEMENT IN NIFTY AND THE FII FLOW DURING THE PERIOD JAN 09 - DEC 09

FII Investment in
Period Monthly Nifty Close Equity Market ( Rs. Crs)

January 09 2874.80 -4245.30

February 09 2763.65 -2436.60

March 09 3020.95 530.30

April 09 3473.95 6508.20

May 09 4448.95 20117.20

June 09 4291.10 3830.00

July 09 4636.45 11066.30

August 09 4662.10 4902.70

September 09 5083.95 18344.30

October 09 4711.10 9077.00

November 09 5032.70 5497.00

December 09 5201.05 10233.10

TOTAL 83424.20

The period of 2009 has been the period good returns for the investors who adopted the strategy of buy and hold.
The Nifty jumped to 5201.05 in December 09 from 2874.80 gaining 2326.25 points ( 80.91%), the FII flows during
this period were to the tune of 83424.20 crs.

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 THE FII MONEY AND THE MARKET TREND

RESEARCH

COMPARATIVE TABLE OF MOVEMENT IN NIFTY AND THE FII FLOW DURING THE PERIOD JAN 10 - SEPT 10

FII Investment in
Period Monthly Nifty Close Equity Market ( Rs. Crs)

January 10 4882.05 -500.30

February 10 4922.30 1216.90

March 10 5249.10 19928.20

April 10 5278.00 9361.30

May 10 5086.30 -9436.70

June 10 5312.50 10508.40

July 10 5367.60 16617.40

August 10 5402.40 11687.50

September 10 (till 15th Sept.) 5860.95 8939.10

TOTAL 68321.80

The period of 2010 has showed continuity in uptrend in the markets. The Nifty has surged to 5860.95 as on 15th
Sept. 2010 from 4882.05 in Jan. 2010 gaining 978.90 points and the inflows from the FII's have been robust during
this period. The total FII inflow during this period has been to the tune of Rs. 68321.80 crs.

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 THE FII MONEY AND THE MARKET TREND

RESEARCH

A REVIEW OF THE TOTAL FLOWS FROM FII AND THE NIFTY MOVEMENT FROM MAR 07 TILL 15TH SEPT 2010

Looking at the above chart from 2007 till date we can see that how the FII investments have affected the movement in the
Indian Markets. Thus, FII investments play an important role in our Indian Markets. This being an important factor should
always be tracked upon. One of the important things which we can be seen in the above chart is the symmetry in the FII
Investments and the Nifty movement, like we can see that in Jan. 2009 and Feb. 2009 the FII flows were on the negative
side, the co-movement in the Nifty also was on the downside. We can see this in maximum no. of periods. Thus, there has
been a strong co-relation in the flows and market movement during any period we take. Apart from it we analyze the
market turns, the major market turns on either side have been witnessed during the months of Mar-April. Thus, a track of
FII Investment is one of those factors which had definitely impacted us in the past and should be eyed in the future too. For
eg. the period of 2007 has been the period of boom as we saw major investments by them, the period of 2008 was a
period of pain due to economic crisis in the global economy, this recessionary period had severe impact on the Indian
Markets too as the global investors sell-off was seen. The period of 2009 saw simultaneous recovery due to reassurance
by the Government in the form of relief packages and the recovery in the economy itself. The period of 2010 has been the
continuity of the recovery for the Indian Markets as we are a growing economy with lots of potential. The GDP of India is
on constant rise, the business prospects and political stability all are attracting the foreign investors to be a part of the
Indian Markets.

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 THE FII MONEY AND THE MARKET TREND

RESEARCH

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