Street signs: FPI buying buoys sentiment, IndusInd stock, and more

FPI buying buoys sentiment 

Many on the Street are cheering the return of foreign portfolio investors (FPIs). In the last three trading sessions, FPIs scooped shares worth more than Rs 4,000 crore, spurring a 13 per cent rally in the market. Domestic institutional investors (DIIs), on the other hand, are seen taking some money off the table. In March, FPIs have pulled out a record Rs 62,000 crore from domestic equities, triggering a 26 per cent drop in the benchmark indices. “Clearly, the risk-on sentiment is back aided by the aggressive stimulus packages and muted growth in Covid-19 cases in key geographies. Usually, FPIs don’t change the direction that frequently, which means the markets could extend gains,” said an analyst adding that the Nifty is headed towards 9,300. Last week, the Nifty had ended at 9,112.

Samie Modak

IndusInd FPI holding nears ceiling

Shares of private sector lender IndusInd Bank rallied 26 per cent last week. The sharp gains came days after the stock was added to the ‘FPI red-flag’ list by depository firm NDSL. A red flag is issued when the foreign investment legroom in a stock is less than 3 per cent of the total foreign portfolio investor (FPI) cap. According to NSDL data, only 12 million shares of IndusInd Bank are available for FPI buying with overseas investor shareholding at 72.3 per cent against cap 74 per cent. “It appears that some large FPIs have bought shares of the bank aggressively taking advantage of the stock price fall,” said an analyst. Before the latest rebound, shares of IndusInd Bank had crashed over 80 per cent from their 2020 highs amid the Covid-19 selloff.

Samie Modak

Back-up worries for money managers 

An asset manager had set up operations in another part of the country, many hundreds of kilometres away from its usual place of business. The idea was for this centre to serve as a back-up in the event of a disaster. If one fails, the other can keep the business running. The lockdown has meant that both places are similarly affected, throwing a spanner in its well-laid plans. Last heard, it had managed to keep essential work going, but things are only running at 50 per cent capacity.

Sachin Mampatta