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Despite reports to the contrary, the foreign institutional investors (FIIs) were net buyers on Dalal Street by pumping in $2 billion in June quarter, says a Bank of America Merrill Lynch (BofA-ML) report.
'FIIs' interest remained positive in Q1 on the markets here. This was the fourth consecutive quarter when the domestic markets have seen positive flows from the FIIs.
'However, compared to $10 billion inflows in the previous quarter, FIIs' net inflow was just $2 billion in the June quarter,' the report said today, adding that FIIs have now become cautious due to the lingering growth worries.
FIIs were bullish on pharma, industrials, real estate and utilities during the quarter and were bearish on consumer staples and energy. But FIIs and LIC were net buyers, while domestic MFs were net sellers, the report said.
Also, FIIs' holding in Sensex has gone up to the highest level in last eight years in the June quarter whereas the promoters' shareholding is the lowest in last eight years.
Pharma saw the highest net buying by FIIs with they buying into Dr Reddy to the tune of $210 million and into Lupin at about $110 million.
For the first time in five years, financials was not the most over-owned sector for FIIs. Financials have been replaced by consumer discretionary as the biggest overweight sector for FIIs, which is at the highest level since 2008 and 3/10 top over-owned stocks are from this sector.
Software continued to be the largest underweight sector for FIIs. The sector saw an increase in this due to muted buying compared to its weight in FII portfolio. The second largest underweight was the energy sector.
LIC too was a net buyer during the quarter by picking up Infosys, Wipro, TCS, metals & mining like MMTC, Coal India, Energy stocks like RIL, Cairn India, the report said.
On the other hand, domestic MF sold equities with an outflow of $750 million in the June quarter compared to $1 billion in the previous quarter.
