Foreign institutional investments in equities soared by 43 per cent to over $9.43 billion this year pushing the Sensex to intra-day record high of 6,409 on Wednesday.
'We like certain stocks from banking, insurance, retail, hospitals and capital goods.' 'Though some of these stocks may seem expensive, they will compound well over the long term, thus justifying their current multiples.'
Raising concern about over-dependence of Indian capital markets on foreign institutional investors, eminent banker Deepak Parekh has said that something needs to be done to change this pattern.
Capital market watchdog Sebi on Friday said foreign institutional investors have to, by October one, end the practice of investing money collected from a single or few investors in stocks, as a guard against manipulation.
Foreign institutional investors (FIIs) are set to pump in more funds in debt securities, as the next government under the Bharatiya Janata Party (BJP) is expected to be a stable one and is seen as growth-oriented by market participants.
Among Sensex shares, Tech Mahindra, Infosys, Asian Paints, ICICI Bank, Kotak Mahindra Bank, Titan, IndusInd Bank and Bajaj Finserv were the major laggards. Nestle, Tata Steel, Mahindra & Mahindra, Bajaj Finance, HDFC Bank and Tata Consultancy Services were among the gainers.
Monetary policy stance to depend on inflation data
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As per the latest data compiled by market regulator Securities and Exchange Board of Indiabi, the net investments by Foreign Institutional Investors into Indian equity markets stood at Rs 51,433 crore (Rs 514.33 billion) this year so far, while the same for debt markets was at Rs 52,115 crore (Rs 521.15 billion) taking the total to Rs 1,03,548 crore ($17 billion).
Among the Sensex firms, Infosys, NTPC, Power Grid, Titan, ITC, Tech Mahindra, Hindustan Unilever, Axis Bank, Tata Consultancy Services, Bajaj Finserv, Reliance Industries and UltraTech Cement were the biggest gainers. In contrast, IndusInd Bank, Kotak Mahindra Bank, Mahindra & Mahindra, JSW Steel, HDFC Bank and Maruti were the major laggards.
The reduction in holdings comes at a time when technology firms are facing cross currency headwinds due to volatility in the global financial markets
Among the Sensex firms, JSW Steel, Titan, Tata Steel, Sun Pharma, Reliance Industries, Bharti Airtel, Tata Motors and HDFC Bank were the biggest gainers. NTPC, Tech Mahindra, Maruti, State Bank of India and Larsen & Toubro were among the laggards.
Among the Sensex firms, Axis Bank fell over 4 per cent, emerging as the biggest laggard. State Bank of India, IndusInd Bank, NTPC, UltraTech Cement, Bajaj Finserv, Tata Steel, JSW Steel, Maruti and Larsen & Toubro were the other major laggards. Nestle, Hindustan Unilever, HDFC Bank, Tata Consultancy Services, Infosys, HCL Technologies, and Asian Paints were among the gainers.
Foreign inflows into the equity market appear to be chasing the prospect of a supposed game-changing BJP election victory, with the party's strong performance in recent state elections boosting these hopes
Attributing the fall in stock markets in the past few days to selling by FIIs, Finance Minister Pranab Mukherjee asserted on Wednesday that the fundamentals are strong and the economy will clock 8.5 per cent growth in the current financial year.
An analysis of shareholding patterns of three-listed airlines showed that foreign institutional investors have reduced their stakes in Kingfisher and SpiceJet while hiking their holdings in Jet Airways in three months ended December 2011.
The markets ended lower on FII outflows and concerns over rising inflation.
Any sustainable increase in FII flows into the Indian markets would rest on the expectations of sustained improvement in the Indian economy.
The Reserve Bank of India (RBI) may consider measures to deal with foreign institutional investor (FII) inflows, which are emerging as a potential threat, said the central bank's Deputy Governor, Subir Gokarn, in Mumbai on Tuesday. His comments came a day after Finance Minister Pranab Mukherjee said there was no need for restrictions on foreign inflows, in an interview with a television channel.
From the Sensex pack, Bharti Airtel, HDFC Bank, Titan, ITC, UltraTech Cement, Sun Pharma, Bajaj Finserv, Bajaj Finance, Hindustan Unilever and Kotak Mahindra Bank were among the major gainers. Tata Steel, Axis Bank, IndusInd Bank, NTPC and ICICI Bank were the major laggards.
HCL Technologies was the biggest gainer in the Sensex pack, rising 5.58 per cent, followed by Tata Consultancy Services and Infosys, State Bank of India, Tech Mahindra, Tata Steel, NTPC and Wipro. In contrast, Nestle, Bharti Airtel, Maruti and ITC were among the laggards.
Among the Sensex firms, NTPC climbed over 3 per cent emerging as the biggest gainer. Tata Motors, Sun Pharma, Tata Steel, State Bank of India, UltraTech Cement, JSW Steel, Bajaj Finance, Reliance, ICICI Bank and IndusInd Bank were the other major gainers. Power Grid, HCL Technologies, Tech Mahindra, Tata Consultancy Services, Infosys and Titan were among the laggards.
FIIs' stake in Naresh Goyal-owned Jet Airways stood at 7.10 per cent during the three months through September, compared to 6.38 per cent during the first quarter of this financial year.
According to market regulator Securities and Exchange Board of India's regulations, FIIs are required to post collaterals for their transactions in the cash segment of the market.
Overseas investors have made net investments of $1.2 billion in the Indian equity market during the first week of the month, taking the total for 2012 so far to a whopping $21 billion.
Rashesh Shah, MD, Edelwiss Capital, said apart from participating in mega public offers, ADRs, and FCCB conversions, FIIs have started investing in the secondary markets over the last few weeks.
Foreign investors have pumped in over Rs 1 lakh crore in the Indian securities market since Narendra Modi was announced as the prime ministerial candidate by Bhartiya Janta Party (BJP) in September last year.
Even as foreign institutional investors are rushing out of the Indian equity markets, there are fresh indications that their selling may accelerate in the coming weeks.
In a major development on taxation of FII income, the Authority on Advance Ruling has ruled that income will now be taxed as capital gains and not business income.
The liquidity-driven market rally since September, which has seen about $2 billion of inflows into the Indian equity markets, has propelled the benchmark the S&P BSE Sensex to a new high after about six years.
India attracted $1.4 billion FIIs in November, says a report by HSBC.
Continuing to bet on the government's reforms agenda, overseas investors have pumped in a whopping Rs 17,000 crore in the Indian capital market since the beginning of this month.Continuing to bet on the government's reforms agenda, overseas investors have pumped in a whopping Rs 17,000 crore in the Indian capital market since the beginning of this month.
Among the Sensex firms, NTPC, Tech Mahindra, UltraTech Cement, Bajaj Finance, ITC, Bajaj Finserv, Axis Bank and Power Grid were the major gainers. On the other hand, Mahindra & Mahindra, HCL Technologies, Titan and IndusInd Bank were among the laggards.
The RBI interest rate decision, industrial production data for June and the ongoing quarterly earnings from corporates would largely drive the stock markets this week, analysts said. Other major factors such as global market trends, the movement of oil prices and the trading activity of foreign investors would also influence trading, they added. "The market will have an eye on the RBI Monetary Policy Committee (MPC) meeting, which will be announced on August 10, 2023. We are heading towards the last batch of Q2 earnings of key companies such as Adani Ports, Coal India, Hero MotoCorp, Hindalco and ONGC, among others, which will lead to stock-specific movement," said Pravesh Gour, senior technical analyst, Swastika Investmart Ltd.
The other prominent gainers were Tech Mahindra, HCL Technologies, Wipro, State Bank of India and Larsen & Toubro. Bajaj Finserv, Power Grid, UltraTech Cement and HDFC Bank were among the laggards.
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