Should you follow investment pattern of FII inflows in India?

We hear a lot about sales and purchases made by foreign institutional investors (FIIs) in Indian equity markets, with these numbers often making headlines. Why are we so obsessed with FIIs? Most analysts say India is equally or better placed than other emerging markets for attracting foreign funds. "We have a large number of companies with capitalisation of over $1 billion (Rs 4,900 crore)," says Parmar. India also has a strong central bank, which has managed to keep the economy out of global financial troubles.Espirito's Paulson says that given the extent of the current global uncertainties, India's domestic exposure will come back into focus. "Right now, the rest of the world makes India look good. The US and EU issues are well known, while China is more globally exposed and has to adjust to an erosion in wage competitiveness," says Paulson.The problems India faces are by no means trivial-with the global crisis adding to inflation, slowing growth and corruption. "Although these issues won't disappear overnight, with a 20% fall in the market along with earning multiples that are below the long-term average, India offers compelling opportunities," says Paulson. So, while FIIs' moves can be a good indicator of favourite sectors, do not follow them blindly as you may not be as nimble-footed as them.