Financial year 2016 has so far kept Dalal Street traders on their toes, with persistent volatility and eroding wealth in equity markets, driven in major part, by foreign portfolio outflows. But through the height of the 2014-2015 bull run, fund inflows, largely by foreigners and to an extent by domestic investors, had kept the stock markets cruising through many record highs.
A recent report by Kotak Institutional Equities shows FPIs had bought equities worth R37,000 crore in the quarter ended March 2015. The bulk of those inflows was in sectors like metals & mining, technology and pharmaceutical stocks, in a shift from past trend.
Stocks like Indiabulls Real Estate, HDIL and Dewan Housing Finance saw the highest increase in stake, as per the KS-Ownership Navigator while FPIs pared their stake the most in L&T Finance, LIC Housing Finance and J&K Bank. The biggest overweight among foreign investors has been seen in the banking and technology packs and the key underweights included industrials and consumers.
FPI holding (including ADR and GDR) in BSE-200 companies reached 25.3% in the March 2015 quarter versus 24.6% in the December 2014 quarter.
In contrast, mutual funds primarily bought into banking, auto and cement stocks while selling energy and technology. MFs were overweight industrials and auto and underweight consumers, technology and metals & mining. Mutual funds upped their stake the most in mid caps like Cholamandalam Finance, MCX India and South Indian Bank and pared the maximum stake in KEC International, Kaveri Seeds and Info Edge.