Monday, November 29, 1999

FIIs throng metals, auto stocks in Q1

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Metal stocks have been foreign institutional investors' (FII's) favourite sector last quarter, a study by Enam Research has found. FIIs invested close to $4.4 billion in the Indian market. The metal sector received an investment of $826 million, or 19% of the total inflow. This was followed by the auto sector and the banking and financial services, which attracted $451 million and $400 million, respectively.Domestic mutual funds, in contrast, sold metal stocks worth $100 million during the same period, while putting $2,489 million into banks and financial institutions."Capital always chases assets where growth exists," said Anish Jhaveri, CEO, Antique Stock Broking. He added: "Even as the global economy is still struggling, Indian economy is projected to grow 8% per annum. With domestic consumption remaining robust, sectors like cement, steel and auto offer high growth visibility, attracting investment from overseas investors." The metal share prices, though, have taken a beating in recent times on the back of expectation of lower demand from European economies.Banking and financial service firms continued to be most preferred sector for FIIs— though it reduced its overweight position on the sector. Stocks like HDFC and HDFC Bank witnessed selling to the tune of $252 and $150 million respectively, while shares of Axis Bank worth $224 million were picked up by the FIIs. In fact, stocks of banks and financial services witnessed buying across all the three investor classes namely MF, FIIs and BFIs (Banks and Financial institutions) during the quarter with MF and BFI pumping in $54 million and $ 724 million, respectively. FIIs invested $400 million in the category.RIL, REC, Tata Steel, Hindalco, Ultratech, ICICI, ITC and Bajaj Auto remained the most preferred stocks among overseas investors. During the quarter, FIIs sold shares of engineering companies worth $554 million, while Oil & Gas, realty and Infra structure shares witnessed selling to the tune of $126 million, $133 million and $31 million respectively. Least preferred stocks among these sectors were L&T, GAIL, ONGC, RIL Infra, Cairn and Tata Power.The percentage holding of FIIs and MFs in BSE 500 companies fell 20 basis points (bps) and 10 bps, respectively during the first quarter. For BFIs, it increased by 40 bps. During the first quarter MF sold $1.3 billion of equities, while BFIs bought $3.1 billion into equity markets on a net basis, data compiled by Enam Securities shows.

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