Foreign Investors in Indian Markets- What are they Buying?
Indian shares have recently risen up as businesses opened and economic activities resumed after the lockdown. Analysts said that the inflows of foreign capital into domestic shares have fuelled the equity rally.
The data of NSDL claims that Rs18,239 crore has been pumped into the Indian financial markets so far in June. Pulling out Rs7,356 crore during May, FIIs remained the net sellers. Towards month-end, the trend reversed with FIIs pouring more liquidity into Indian markets due to balancing of portfolios to adjust for the new MSCI index.
FIIs have majorly dominated the BFSI with 39.8 percent weightage. Thus, BFSI and Technology accounts for more than 50% of FII allocation if the Nifty-500 is used as the benchmark.
FIIs have increased weight in Consumer, Technology, Healthcare, Telecom and Retail, reports brokerage Motilal Oswal, while, Private Banks, NBFCs, Autos and Metals saw a reduction.
Private Banks top the FII holdings with $72 billion investment value.
FIIs reduced stake in 90% of Nifty-50 companies on a QoQ basis, while DIIs increased stake in 78% of Nifty-50 companies.
FII holdings of Bharti Airtel and Zee Entertainment increased while that of Eicher, Axis Bank, Tata Steel, ICICI Bank and Grasim declined.
After the central banks pumped cash into the market by slashing interest rates and offering packages, there’s an excess of global liquidity.