Foreign Institutional Investors' confidence is back again on the Indian equity market. After the economic downturn in 2008, Indian equities are the favorite of FIIs. The FIIs invested approximately Rs. 88,000 crore in Indian equities during 2009, a survey reported.

FIIs bought Indian domestic shares worth Rs. 7.36 lakh crore in gross during 2009 and recorded a gross sale of Rs. 6.48 lakh crore for the same period. As a result, FIIs' net purchase remained at Rs. 87,987 crore for the calendar year 2009. The FIIs' investment of Rs. 87,987 crore in 2009 was also the highest ever in the country in terms of rupee investment in a single year. The previous high was at Rs. 80,915 crore in the year 2007.

With the collapse of global financial services icon Lehman Brothers in the middle of September 2008, FIIs pulled out over Rs. 41,216 crore from Indian equities. The selling pressure continued till the first two months of 2009.

However, with greenshoots of recovery in global economies becoming more and more visible, net FII investment turned positive in March 2009 as overseas investors opted to invest heavily in India. During April-June quarter of 2009, FIIs invested Rs. 31,000 crore in domestic shares and the trend continued to the September quarter when they invested Rs. 31,313 crore.