Foreign portfolio investors increased their holding in consumer goods, pharmaceuticals, oil & gas and information technology sectors in the quarter ended June as they bet on defensive stocks during the pandemic.
FPIs increased their stake by more than 50 basis points sequentially in these sectors, according to a report by Axis Capital. They, however, reduced stake in banking and financial services, auto, metals and realty.
Overseas investors’ holding in Nifty 50 stocks stood at 25.7% in the quarter ended June as they raised stake in companies such as Asian Paints Ltd., HDFC Standard Life Insurance Ltd., Mahindra & Mahindra Ltd., among others.
That came as Indian markets staged a comeback after their worst quarterly selloff in January-March because of the the Covid-19 pandemic. The S&P BSE Sensex rose 18.5%, while the NSE Nifty 50 index gained 19.8% in the three months ended June.
Domestic institutional investors increased their stake in private banks such as ICICI Bank Ltd. and Kotak Mahindra Bank Ltd., along with utilities like NTPC Ltd. and Power Grid Corp.
They pared holdings in companies including Cipla Ltd., Grasim Industries Ltd., Larsen & Toubro Ltd. and Zee Entertainment Enterprises Ltd. Overall, DII holding in Nifty 50 companies fell 10 basis points on a sequential basis to 14.6% during the quarter.
Betting On Defensives
Both foreign and domestic institutions turned defensive during the quarter, increasing stakes in fast-moving consumer goods, pharma and IT companies.
Changes In Portfolio
FPIs and DIIs took opposite positions on certain stocks. While foreign investors increased their holding in RBL Bank Ltd., their domestic counterparts reduced their shareholding in the private lender by most among peers.
Similarly, while FPIs were buyers of Gujarat Mineral Development Corp., domestic institutions were net sellers of the stock.
Diagnostic firm Metropolis Healthcare Ltd. was a common bet as both foreign and domestic institutions increased their holding in the stock.
FIIs sold close to $8 billion in March, while buying shares worth $10.5 billion from May till date, according to Axis Capital. DII activity remained muted as they sold shares worth $300 million.
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