Stock markets may still attract FIIs this month. Here's why.

Indian market, which has been popular among foreign institutional investors (FIIs) for quite some time, recently lost its tag of being the most favoured emerging market.

India had earned the most favoured emerging market in the Britain's FTSE 100 in 2014.

Though data to support the fact that China has taken India's place in FIIs' good books is not available, a 40 per cent sharp rally in the Shanghai Composite Index, mainly due to foreign investors, indicates the same.

Bloomberg data shows that in April, FII inflows to India were only $1.8 billion, much lower than South Korea ($3.9 billion), Taiwan ($3.4 billion) and Brazil ($2.3 billion), among others.

But the picture is not all gloomy as on a year-to-date (YTD) basis, India still retains the tag of being the most favoured emerging market, according to FII data received for the first three months of 2015.

The sharp fall in inflows in April is being attributed to uncertainty regarding the passage of Land Bill and Goods and Services Tax Bill in Parliament.

With the government clearing the GST Bill in Lok Sabha on Wednesday, India is likely to see renewed thrust in FIIs this month.

The benchmark BSE Sensex continued its losing spree on Thursday, shedding 118 points to end the day at 26,599.11.