It has been a different December for foreign institutional investors this year. Traditionally, they go into a slumber in December, but this time they are on an overdrive as if there is no January following Christmas.

The FIIs made a net investment of $758.2 million (Rs 3,738.3 crore) till December 17, the highest net investment in December in the last 10 years.

Offshore funds have made a net investment of $6.05 billion (Rs 28,280 crore) in shares so far in 2003, their highest annual inflow since foreign portfolio investments were allowed in India a decade ago.

In the last five years, FIIs pulled out money from Indian equities only once, in December 2000, when they were net sellers to the tune of Rs 412.90 crore (Rs 4.13 billion).

In 2002, FIIs were net buyers to the extent of Rs 440.3 crore (Rs 4.4 billion). In 2001, their net purchases stood at Rs 264.8 crore (Rs 2.65 billion).

In the last 11 years, since they were allowed to invest in the Indian market, FIIs have been net sellers in only five of the 44 quarters. Significantly, FIIs have been net investors in Indian equities under all economic, political and stock market conditions.

Abhay Aima, country head (equities and private banking), HDFC Bank, says: "I believe a lot more new foreign funds are entering the Indian markets now, especially towards the year-end."

Adds VVLN Sastry, country head at First Call India Equity: "The second spell of FII inflows has just began, which I believe will be much higher than the current year inflows."

He feels that with global geo-political tensions easing, emerging markets are set to become the preferred destination for inflows.