Nifty Signals Software for Buy Sell Signals for Day Trading

INDIAN STOCK MARKETS &INVESTMENT LIMIT FOR FII

In Indian Stock Market, Foreign Institutional Investor (FII) is allowed to invest in the primary and secondary capital markets through the portfolio investment scheme (PIS).

Under this scheme, FIIs can acquire share / debentures of Indian companies through the stock exchanges in India.  The ceiling for overall investment for FIIs is 24 percent of the paid up capital of the Indian company.  The limit is 20 percent of the paid up capital in case of public sector banks, including the State Bank of India, whose huge selling by FIIs brought the share to below 2000 level in February and March series.  The besttrading software analyses these aberration in FIIs inflow or outflow resulting in such a sharp reaction in even BULL MARKET.

THE CUT-OFF

The ceiling of 24 per cent for FII investment can be raised up to sectoral cap / statutory ceiling, subject to the approval of the board and the general body of the company passing a special resolution to that effect. And the ceiling of 10 per cent for NRIs / PIOs can be raised to 24 per cent subject to the approval of the general body of the company passing a resolution to that effect.  The ceiling for FIIs is independent of the ceiling of 10 / 24 per cent for NRIs / PIOs.

The Reserve Bank of India (RBI) monitors the ceilings on FII / NRI / PIO investment in Indian companies on a daily basis.  Fore effective monitoring of foreign investment ceiling limits, The RBI has fixed cut-off points that are two percentage points lower than the actual ceilings.  The Intraday tradingsoftware keeps track of these investments on daily basis too. It helps analyse the mood of FIIs towards Indian stock market. 

RBI’s STANDING ACTION

Once the aggregate net purchase of equity shares of the company by FIIs / NRI / PIO reach the cut-off point, which is 2 % below, the overall limit, the RBI cautions all designated bank branches so as not to purchase any more equity shares of the respective company on behalf of FII / NRI / PIO without prior approval of the RBI.  The link offices are then required to intimate the RBI about the total number and value of equity share /convertible debentures of the company they propose to buy on behalf of FII / NRI / PIO.  On receipt of such proposals, the RBI gives clearance on a first come first basis  till such investments in the companies reach 10 / 24 / 30 / 40 / 49  per cent limit or the sectoral caps / statutory  ceilings as applicable.  On reaching the aggregate ceiling limit, the RBI advises all designated bank branches to stop purchases on behalf of their FII / NRI / PIO clients.  The RBI also informs the general public about the ‘caution’ and ‘stop purchase’ in these companies through press release.

The intraday traders cautiously watch the moves of FII and go with their flow.  The activity of FII can also be seen majorly in NIFTY FUTURE OR NIFTY OPTION trade which shows sudden spur and nose-dive reactions.

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