Overseas investors bought a net $8.95 billion of Indian equities

I don't think it is entirely due to FII's there are other two reaons, One is the last two quarters earnings of Companies were not bad and two even the exports are not hit by the downturn may be due to filling of our WTO quota being a member there. Then there is a third factor which is the stimulus which is still in place. The market probably went down 60% last june probably due to Crowd panic orignated from meltdown abroad. Once things got sorted out a little bit the market is moving back to somewhere where it waa previously. FII activity I believe creates minor fluctuations, in fact their activity looks like they invest say some amount today simultaneously pulling out around same amount they invested earlier, which keeps the quantum of their investment here almost constant.

I don't think current rallly is only fueled by overseas investing. Yes oversea investing is a part of it but it's improved corporate result and last quarter sectrol growth particularly good growth in manufacturing and Industrial sector has contributed in great deal by improving  sentiment for future outlook of Indian industry.