India was the second most favoured nation for foreign investors seeking to invest in emerging markets across the globe. “Brazil, India and Indonesia saw notable FII inflows among the key emerging markets we track, while South Africa and Taiwan saw big outflows,” brokerage firm CLSA mentioned in a note. Foreign Institutional Investors (FII) pumped in $2.4 billion into domestic markets for the duration of the prior month, turning net purchasers soon after two consecutive months of outflows. FII funds identified its way into IT stocks, discretionary, healthcare and staples although pulling funds out of banks, power, industrials and utilities, CLSA mentioned.
Foreign investors turned net purchasers in June
Brazil was the best location for foreign investors, pumping in $3.3 billion, followed by $2.4 billion into India and $.3 billion to Indonesia. Foreign funds purchased 8 basis points of India’s total market place cap in June. Of the funds flowing into India, non-India-devoted ETFs infused$1.8 billion although non-India-devoted active funds infused $.1 billion, CLSA mentioned. In the debt market place, FIIs infused $.6 billion. FII inflows came soon after two successive months of outflows from the domestic market place. However, FIIs have after once again turned net sellers for the duration of the initially fortnight of July pulling $.5 billion from stocks.
Cut stake in bank stocks, improve weight in IT sector
The biggest function reversal was seen in FIIs pulling funds away from banks and placing the similar in IT stocks. “Active selling pulled down FII overweighting in banks by 75 basis points on-month to a multi-year low of 7.5 percentage points (ppts),” CLSA mentioned in the note. In the month of May, FII 8.3 ppts stake in banks. Further, FIIs have reduce their overweighting position in industrials by 43 basis points to a 14-month low of 1.3 ppt. Foreign investors rather employed their funds to invest in more facts technologies stocks, growing weightage by 87 basis points. “Banks, followed by discretionary, industrials and NBFC, remain the largest overweight sectors, while materials, energy, IT and staples were the biggest underweights in FII portfolios at the end of June 21,” the report mentioned.
During the month of June, the Nifty 50 index gained .9% to attain 15,722. Nifty’s overall performance was superior than big international peers such as the UK, Germany, China, Singapore, and Hong Kong. In terms of sectoral overall performance, IT and healthcare had been the greatest-performing sectors for the duration of June. IT sector jumped 9.2%, followed by a 4.3% rally in healthcare stocks, FMCG, Realty and PSU had been the other best performers. On the other hand, Metals, Oil & Gas, Power, and Banks had been the worst-performing sectors in June.