Net investments by foreign institutional investors in the calendar year crossed Rs 10,000 crore (Rs 100 billion) today. The signals are that their appetite is still undiminished.

According to figures released by the Securities and Exchange Board of India, net investments by FIIs since January 1 stood at Rs 10,047.9 crore (Rs 100.479 billion) on August 19.

In August, foreign funds have put in a net amount of Rs 1,526.1 crore (Rs 15.261 billion).

Buoyed by the FII flows, the Bombay Stock Exchange Sensex gained 50 points today to close at 4056. Technology, bank and public sector stocks stole the limelight.

The relentless buying by the FIIs has sustained the market so far, and they are still buying at relatively higher levels.

It was in 2001 that net FII investment had touched Rs 12,086 crore (Rs 120.86 billion) in the same period. In the subsequent year, it had tapered off to Rs 2,898 crore (Rs 28.98 billion) in the same period (January 1-August 19).

"Foreign fund flows continue and there is little selling pressure, pushing stocks higher," said a dealer with a local brokerage.

The BSE Sensex has gained over 20 per cent during this

period, making it one of Asia's better performing markets.

Most of the gains have been notched by old-economy stocks as funds pumped in money on expectations of stronger economic growth and better corporate profits following a good monsoon.

Ved Prakash Chaturvedi, chief executive of Tata TDWaterhouse Mutual Fund, said though the undervaluation in the market has been corrected to some extent, growth in the economy, a stable currency and lack of alternative avenues for investment are driving the investment frenzy.

"From a short-term perspective, the market may be overheated but from a medium-term perspective there are still a lot of investment opportunities," he pointed out.

The FIIs are expected to push the limit to the maximum before starting to consolidate their gains, which is expected to happen in a short while.

In fact, investor sentiment has already started to turn

cautious as they have learnt from previous experience that the foreign funds start to pull out when they need the money to fulfil obligations in their home countries.