DIIs Hold More Power Today

About 10-15 years back, I remember that our markets were dependent on foreign institutional investor (FII) money. The markets would go up if they pumped in the funds and would go into a tailspin if they decided to pull out.  We would actually track their fund flow patterns to predict the movements in our markets. The FII money was also called “Hot Money” and consisted mostly of foreign hedge funds, emerging market funds and others. The fund managers of such funds would keep searching for greener pastures to put their money in the markets worldwide. Such funds had no qualms in investing in those markets which were comparatively performing better and pulling out of our markets at the drop of their hats. Resultant? our markets would stay depressed until the FIIs magnanimously decided to come back. In other words, we were held hostage by these FIIs as our domestic...