Overseas investors purchased non-banking financial corporations (NBFCs) and telecom stocks in the month of June, which saw a net outflow of Rs 16,000 crore from the domestic equity.
Not just FPIs, domestic mutual funds (DMFs) have also been looking out for opportunities in the market and are preferring banks.
As per a report by CLSA, DMFs added selected banking names like IndusInd Bank, Axis Bank, ICICI Bank and HDFC Bank. In fact, DMF’s banking sector weighting rose 40 basis points QoQ and is the highest in 10 quarters. Amongst Nifty stocks, DMFs added Sun Pharma to the list of top-5 overweight while Wipro is the new entrant to Top-5 underweight list.
“FPI inflows of US$3.1 billion led to their market ownership rising 10bps QoQ to a five-quarter high of 20.2 percent. Also, FPIs’ exposure to NBFC rose 140bps QoQ to multi-year high of 17.5 percent”, the report said.
FPIs’ have been investing in both lending (HDFC, LIC Housing Finance, PFC, REC) and non-lending NBFCs (ICICI Lombard and the 3 big life insurance companies- ICICI Prudential, HDFC Life and SBI Life).
The research house said that 85 percent of FPI portfolios were invested in large caps compared to 74 percent for DMFs.
First Published: Aug 8, 2019 8:57 AM IST
