It's raining dollars in the Indian stock market with the
overseas investment on the local bourses crossing three-billion
dollars mark since the beginning of this year.

Foreign Institutional Investors have put in a net of 3.05 billion
dollars (over Rs 13,500 crore) in the Indian stocks so far in 2007,
while taking their total net investment in the country so far to over
52 billion dollars.

However, the net FII inflows in the first four months of 2007 is over
a billion dollars, less than the figure invested in the same period of
the previous year.

More than half of the net investment by FIIs this year came in the
month of April alone after the overseas investors returned to the
bourses with positive sentiments as Sensex regained its once-lost
14,000 level.

The bourses had witnessed a herd-like flight of FIIs after a sharp
fall in February this year, but with the corporate earnings results
meeting or beating expectations, the sentiments have improved
considerably, said a broker.

According to the data available with the market regulator SEBI, FIIs
purchased stocks worth close to Rs 46,400 crore and sold stocks worth
about Rs 39,500 crore in April 2007, taking their net investment to
about Rs 6,900 crore (about 1.56 billion dollars).

However, the net FII investment for January-April period is estimated
to remain around three-billion dollar level, as against about 3.3
billion dollars in the same period of 2006, said another broker.
FIIs had purchased stocks worth a net of about eight billion dollars
in entire 2006, as against a record high of 10.7 billion dollars in
2005. A sharp plunge of about 30 per cent in the May-June period and
another major fall in December were the major drivers for the decline
in FII inflows last year.

However, if the prevailing positive trend continues on the FII front,
the total overseas investment on the domestic bourses could rise to as
high as 12 billion dollars, while beating the record set in 2005, the
broker added.

Besides, the depreciating dollar against the Indian rupee could also
propel the net FII inflows in terms of the US currency.

this mark for a couple of weeks, the sentiments could get a
significant boost and herald a prolonged uptrend on the bourses.

Last week, the Sensex plunged by more than 320 points on Friday while
ending a five-day upward rally primarily driven by strong corporate
results.