In December quarter, foreign portfolio investors (FPIs) increased their total ownership in top 75 companies by 15 bps on a quarter-on-quarter basis. This compared to a 40 bps fall seen in the September quarter.
They also raised stake in the broader market by 36 bps for the December quarter, Morgan Stanley said in a note.
The report by the global investment bank further added that by the end of the quarter, domestic mutual funds (DMF) had raised their stake in equities to 7.4 percent — highest level in history. At the aggregate market level, FPIs upped their stake by 36 bps to 19.1 percent.
In terms of sectors, financials emerged as the biggest 'overweight' for FPIs (vs MSCI India index). And domestic mutual funds (DMFs) and domestic institutions (DFIs) were 'overweight' on consumer staples space compared to the Nifty index.
Both DMFs and DFIs are 'underweight' on the Financials sector compared to the Nifty index.
During the quarter, FPIs added positions in four sectors with most additions seen in consumer discretionary and financials (the O/W positioning fell to a 2-quarter low in 3Q18) sectors while they increased their 'underweight' position in communication services and consumer staples, added the Morgan Stanley report.
The report further added that at the end of the quarter, financials space appears to be the only and the largest 'overweight' for FPIs. Energy and consumer staples sectors are the largest 'underweight' for FPIs.
FPIs poured the maximum money into HDFC, ICICI Bank and HDFC Bank, and reduced positions in Reliance Industries (largest U/W).
Domestic mutual funds (DMFs), the largest buyers of Indian stocks during the quarter, also added the most positions in ICICI Bank and Axis Bank, and reduced positions in ITC (their largest OW).
Financials and consumer discretionary are their most preferred sectors and we like ICICI Bank, MSIL, HDFC Bank, Reliance Industries, SBI and L&T, added the report.
In the December quarter, DMFs raised their stakes in equities by 65 bps - this is the highest QoQ change since 2001. Similarly, the Indian public made a comeback during the quarter and raised their stakes by 45bps - highest QoQ change since Jun-09, said the report.
First Published: Feb 7, 2019 3:39 PM IST
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