Stock market dance to tunes of FPIs; retail investors out of sync

Stock prices aligned better with foreign portfolio investors (FPIs) than individual investors during the December quarter

The 766 NSE-listed companies in which the FPIs hiked their stakes gained an average of 1.9 per cent during the three months, whereas in 871 companies in which overseas funds pruned their holdings dropped 8.2 per cent, according to data compiled by Prime Infobase. Retail investors, on the other hand, were out of step as 1,081 companies in which they hiked stakes fell an average 7 per cent, while 895 companies in which they cut their stakes, gained an average of 3 per cent. Interestingly, 589, 294 and 71 companies where mutual funds, insurance companies, and Life Insurance Company (LIC) hiked their stake fell an average 4 per cent, 5 per cent, and 12 per cent, respectively. This shareholding and price trend indicate that while FPIs have been reducing their exposure to domestic equities, they remain the most influential group on the Street.