FIIs Balance Equities amid Continued Global Uncertainty

Despite significant Foreign Institutional Investor (FII) selling, their stake in BSE500 remained unchanged in Q3, with a preference for non-Nifty stocks. The report highlighted net selling of $11 billion, focus on selling in key sectors, and rising domestic institutional investor influence.

According to a report by Axis Capital, despite Foreign Institutional Investors (FIIs) engaging in extensive selling, their equity hold of the BSE500 index remained consistent at 18% during the fiscal third quarter. An apparent preference for non-Nifty stocks characterized their strategy, indicating a shift in investment preferences.

The quarter observed a net outflow of $11 billion from FIIs, yet their stake in non-Nifty stocks grew to 14.3%, marking a six-year high. However, their Nifty stock interests fell to 22.9%. Sectors such as energy, financials, automotive, and consumer goods saw intense sell-offs, while FIIs increased their holdings in IT services.

Amidst these moves, domestic institutional investors (DIIs) increased their stake to 16.3%, backed by monthly SIP inflows reaching a record Rs 265 billion. Notably, private promoter and government stakes in BSE500 have declined, reflecting changes in equity issuance and market performance of key corporates such as Reliance and Adani.

(With inputs from agencies.)