Foreign institutional investors (FIIs), the main drivers of Indian markets, raised their holdings in 57 of the BSE 100 companies in the September quarter even as retail investors and high networth individuals (HNIs) remained bearish.
During the same period, retail participants cut their holdings in 61 companies included in the BSE 100 universe, while HNIs brought down their stakes in 53 companies.
Among individual companies, Housing Development and Infrastructure (HDIL) saw the sharpest rise in FII holding to 33.64% — an increase of 5.18 percentage points. Interestingly, retail and HNI holdings also fell the sharpest in HDIL. Retail investors cut their stake by 1.39 percentage points, while HNIs brought down their holdings by 0.85 percentage points to 3.33%.
According to market experts, retail investors are booking profits on rallies. “In the last few days, retail investors are exiting at higher levels. At the same time, FIIs are accumulating stocks as the global liquidity scenario remains positive. Apart from this, FIIs are looking to make profits on the back of appreciating rupee,” said Alex Mathews, head (research), Geojit BNP Paribas Financial Services.
The surge in FII flows has taken the markets to their all-time highs. On Thursday, Sensex posted its highest lifetime close of 21,164. FIIs have pumped more than $16 billion into Indian equities in the current calendar year. In October alone, overseas investors bought nearly $2.6 billion worth of Indian shares. On Thursday, FIIs bought nearly $305 million worth of Indian equities.
According to market observers, the FII buying spree has been sparked off by the renewed assumption that US Fed will delay QE tapering as the US is yet to show signs of recovery. “US Fed is not expected to start winding down its $85-billion bond-buying programme before the first quarter of CY14,” said Arvind Sethi, CEO & MD, Tata AMC.
Among other BSE 100 companies, Tata Global Beverages has seen the second highest rise in FII stake. FIIs have raised their stake by 2.76 percentage points to 20.61% , while retail investors and HNIs have shed their stakes by 0.68 and 0.04 percentage points, respectively.
Companies that have seen heavy selling by retail investors include Lupin (-0.78 percentage points), Hindustan Unilever (-0.64 percentage points), Reliance Infrastructure (-0.57 percentage points) and Infosys (-0.48 percentage points).