FPIs buying metal stocks while selling IT, financials
FPI holding of the benchmark Nifty 50 index nudged up 50 bps quarter-on-quarter (QoQ) to reach 22.9% during Q3 FY23 based on shareholding data. Above trend is driven by FPI buying in stocks such as Axis Bank, Hindalco, L&T, HCL Tech, Hindustan Unilever (HUL) and Infosys along with their relative performance, as per data analysed by brokerage firm ICICI Securities.
However, amongst the other key indices, FPI holdings dipped 20 bps for the NIFTY Next 50 index to reach 13.4% during Q3FY23 while it nudged up 40 bps for the Nifty Midcap and Nifty Small cap index to reach 14.2% and 12.9% respectively.
Key trend to observe is the emergence of foreign portfolio investment (FPI) buying in IT stocks during Q3 FY23. However, initial trends from CY23 are indicating incremental selling by FPIs in IT stocks.
Top-5 sectors with outflows from 1st to 15th January 2023, include financials ( ₹57 bn), IT ( ₹35 bn), energy ( ₹28 bn), discretionary consumption ( ₹25 bn) and telecom ( ₹18 bn) whereas inflows were observed in Metals ( ₹25 bn) and other industrials to some extent, as per the data.
“On an aggregate basis, the FPI holding of Indian stocks stands at ₹47.9 trn as on 15th January 2023, which is 17% of the aggregate market cap of the listed space in India. FPI holding of Indian stocks hit a multi-year low of around 17% in Jun’22 and have since hovered around that mark, which could be a sign of a bottom formation in terms of their holdings,” ICICI Securities said.
Meanwhile, DII flows continue to be positive with mutual fund (MF) flows towards most sectors being positive for December 2022 except for Insurance and Industrials. Systematic invesSIP inflows into MF schemes continue to nudge higher and is now sustaining at a monthly run-rate of over ₹130 bn, as per the data.
The views and recommendations made above are those of individual analysts or broking companies, and not of Mint.
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Ganesh
http://ganesh@finplay.inFinance enthusiast, Mutual fund expert.