Foreign Institution Investors (FIIs) seems to be having more faith in the Indian markets than domestic institutions. Apart from the fact that FIIs have invested over Rs 95,000 crore in the current calendar year, their holding in top 75 stocks is near their all-time high level.
FIIs today hold nearly 21.6% of the shareholding of top 75 companies traded on the NSE, a six year high and marginally lower than its all time high level of 22.1% achieved in the mid of FY2006.
According to a Morgan Stanley research report analysing ownership data, FII holdings have touched a five-year high in the broader market comprising 1,200 stocks. As per the report, FII holdings as on September 2012 was valued at $240 billion, which is marginally lower than the country's forex reserves.
Interestingly, FIIs seem to be having more faith on Indian companies than company promoters. Promoters have reduced their stake to the lowest level in the last nine and a half years. Domestic institutions too have reduced their holdings in Indian companies.
During September 2012 quarter, the maximum buying was seen by FIIs in the energy sector and selling was witnessed in consumer discretionary. FIIs remain overweight on financials and consumer discretionary while they are underweight on material and industrials. FII holdings in the material sector is the lowest since March 2001 and in telecom it is the lowest since June 2003. Financials have seen the maximum buying in the last 12 months.
Among the top 20 stocks owned by institutions, HDFC saw the maximum buying and Infosys was the most sold stock. FIIs are overweight in ICICI Bank and underweight on Reliance Industries.