FPI Nifty ownership lowest since June 2015

In quarter-on-quarter terms, the ownership has witnessed a 70 basis point fall during Q3FY16

The shareholding of foreign portfolio investors (FPIs) in Nifty companies fell to 29.1 per cent during quarter ending December 2016 — the lowest since June 2015.

In quarter-on-quarter (q-o-q) terms, the ownership has witnessed a 70 basis point fall during Q3FY16 as overseas funds sold some of the frontline stocks that were likely to be impacted by demonetisation drive.

According to a report compiled by ICICI Securities, Consumer staples, auto and information technology were among the sectors that witnessed a high selling by FPIs. On the other hand, energy sector was the only one to have witnessed some selling interest from the foreign funds. During the quarter, FPIs net sold equities worth $4.6 billion, the highest in more than ten years.

“Multiple factors have led to the sharp selling by FPIs during the last quarter. The pro-growth narrative for the US economy, growth uncertainty in Indian due to demonetisation pains, weak investment cycle and strengthening of dollar were among the top factors that led to the sharp FPI selling,” said Ravi Muthukrishnan,co-head, Research, ICICI Securites.

LIC Housing Finance, Reliance Industries, ONGC, BPCL and United Breweries were among the most bought stocks by FPIs during the quarter. On the other hand, Tata Motors, HDFC, Infosys, Tech Mahindra and Coal India were the stocks where FPIs pared their stakes. Interestingly, the quarter also saw FPIs reducing their exposure to some of their favourite stocks of recent times including ACC, Tata Motors, Titan, India Bulls Housing Finance and Axis Bank. Currently FPIs are most bullish about private banking stocks like HDFC, Axis Bank and Kotak Mahindra Bank.