By Hritam Mukherjee and Bharath Rajeswaran
(Reuters) -Foreign institutional investors turned net buyers in Indian markets on Monday, provisional exchange data showed, snapping a record selling streak that had partly caused the country's benchmark indexes to confirm corrections earlier this month.
FIIs were net buyers of stocks worth 99.48 billion rupees ($1.18 billion), after 38 consecutive sessions of being net sellers during which outflows totalled to about $16.5 billion.
Foreigners started to pull out money from prized local equities in late September, as China emerged as an alternative after it announced its most aggressive stimulus measures since the pandemic to revive its sputtering economy.
It coincided with a quarterly results season which saw the most downgrades since early 2020 across the board.
The double whammy of foreign fund exodus and lacklustre earnings knocked benchmark Nifty 50 off its record highs, plunging it into oversold zone in October. The Nifty 50 and BSE Sensex were dragged into correction territories earlier this month.
The benchmarks rallied on Monday, after the ruling Bharatiya Janata Party (BJP) secured a decisive victory in the elections of the country's richest state, Maharashtra. [.BO]
Meanwhile, MSCI's addition of five Indian companies, Voltas, BSE, Kalyan Jewellers, Oberoi Realty and Alkem Laboratories comes into effect from market close on Monday.
The inclusion is likely to attract $2.5 billion in passive inflows into India's equity markets, brokerage Nuvama said earlier in November.
HDFC Bank's weightage will see a second tranche of increase in the global standard index, which was estimated to bring inflows worth up to $1.8 billion.
Data on whether the inflows on Monday were directly related to the rebalancing is not available.
Nifty 50 has lost 8% since its record high in late September, which many analysts said made local equities more attractive.
It is time to buy the dip in large-caps, Bernstein analysts said.
($1 = 84.2260 Indian rupees)
(Reporting by Hritam Mukherjee and Bharath Rajeswaran in Bengaluru; Editing by Krishna Chandra Eluri)