Since Sept, foreign funds have made net purchases in Indian equities, making it five straight months in a row.

In fact, in the last few years, FIIs have made staggering purchases in the Indian markets. In the year 2013, they made aggregate net purchases of Rs 112,968.70 crores in the Indian markets, while in 2012, they made aggregate net purchases of Rs 128,360.70 crores.

India has seen robust flows in the last few years ever since the US Federal Reserve decided to begin a QE3 programme. This programme enhanced liquidity in the global financial system and a lot of this liquidity found its way into the Indian stock markets. This was one reason why Indian received substantial FII inflows.

However, the trend might change, since the US Federal Reserve has now decided to pull back some of this liquidity.

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