Mumbai: Though FII’s have invested Rs 94,241 crore since January 2015, they have pulled out nearly Rs17,000 crore from the markets in the first two weeks of May due to MAT worries. However, there are two div-erse views on the actual position created by FIIs.
Market analyst Ambareesh Baliga says, “till there is clarity on MAT, FIIs will continue to sell. The Chinese market is a good performer and the FIIs are taking their money there. The Nifty has corrected from 9,000, when it peaked in March, to little above 8,000,”
He expects the Nifty to fall by another four to five per cent with the mid and small caps stocks falling further. Kishor Ostwal, MD, CNI Research, said the claim that FIIs are taking out money to invest in Chinese IPO is not true. The total amount in Chinese IPOs is $32 billion and FIIs certainly won’t withdraw that much. “The FIIs are here to stay whether Nifty is 5,000 or 10,000.
The real reason is that they are getting higher returns from derivatives trading in India which in no way is co-mparable with global standards. Also their movements in the cash and derivatives markets affect Indian markets because there is no countervailing force to buy when they sell.”He said that both Indi-an and foreign players use technology to create artificial markets. He feels that investors should wait for a fall of another four to five per cent and then invest.
