When Modi’s cash ban singed market in Dec quarter, FPIs were buying these stocks

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NEW DELHI: LIC Housing Finance, United Breweries and oil majors Reliance Industries, ONGC and BPCL were top five BSE100 stocks that foreign portfolio managers bought in the December quarter when the market was down in the dumps following the demonetisation drive.

ICICI Securities in a report said these five stocks witnessed foreign inflows between $50 million and $250 million during the quarter, marking the worst three months of FPI outflows from Indian equities in market history.

Buying was seen in select stocks even as FPI holding in NSE barometer Nifty50 eased by 70 basis points to 29.1 per cent in December quarter from 29.8 per cent at the end of September quarter. This was the lowest-ever FPI holding in Nifty50 stocks recorded since June 2015.

The quarter was hit by the government’s cash ban.
In December quarter earnings, 11 of the 38 index companies that have reported their numbers till last week, beat expectations, 18 met expectations while nine missed expectations, said the ICICI Securities report.

Data compiled by ETMarkets.com showed eight BSE100 stocks actually saw a spike in FPI holdings during the quarter. Shriram Transport (699 bps), LIC Housing Finance (688 bps), Bharat Forge (392 bps), United Breweries (204 bps), Ashok Leyland (195 bps) and Kotak Mahindra Bank (178 bps) saw the biggest jump in FPI holdings during the quarter.

Within the Nifty50 pack, FPIs were overweight on HDFC, Axis Bank, Idea Cellular, Tata Motors and Kotak Bank.

Hindalco Industries, Hero Motocorp, United Breweries, Tata Global and Reliance Industries, on the other hand, saw FPI holdings go up for the second successive quarters.

In Hindalco Industries, FPIs raised their stake to 32.40 per cent at the end of December quarter from 32.3 per cent in September quarter and 29.2 per cent in June quarter. Hero MotoCorp, United Breweries, TGBL and Reliance Industries also saw FPI stake go up by 150-320 basis points in two quarters till December 31, 2016.

Demonetisation took its toll on the market as institutional investors, unlike domestic institutions, remained underweight on consumer staples and PSU banks, besides going underweight on energy, infrastructure and utilities sectors.

Instead, FPIs remained bullish on private banks, materials and NBFCs in contrast with domestic institutions, which were underweight on the same sectors.

The top five FII holdings constituted 30 per cent of BSE100’s total FII portfolio. (See table)