Business Standard-
| Hedge funds accounted for nearly 90 per cent of the Rs 16,000 crore worth stocks sold by foreign institutional investors since July 27. |
| Top officials of foreign brokerages said except for the long-only hedge funds, other hedge funds have been selling continuously this month. |
| “Yes, we have seen selling by hedge funds in India, and no major buying by other foreign clients,†said a senior executive of a Europe-based foreign brokerage. |
| Though hedge funds have been denied direct access to domestic markets, there are several hedge funds operating in the Indian markets. |
| Most hedge funds participate in Indian stock market through participatory notes – an offshore derivative instrument issued by India-registered brokerages where the underlying is Indian equities. Nearly 30 per cent of the FII investments of ($48 billion) are through the PN route. |
| The sales could be attributed to selling spree by hedge funds, which may be facing redemption pressures due to problems in the subprime market in the US. |
