Foreign investors showed huge interest in the Indian markets during the January-March quarter of 2013 as their holding in the benchmark sensitive index Sensex touched an eight-year high in the said period, Bank of America Merrill Lynch said.
According to a research note by Bank of America Merrill Lynch, while the FII holding in the Sensex has gone up to the highest level in the last eight years, LIC and domestic MFs were net sellers.
During the March quarter, FIIs remained positive on the Indian markets as was reflected by the heavy buying by them during the quarter, the report said.
Based on average prices in the BSE-500, close to $10 billion was pumped in the Indian equity markets by the FIIs in the quarter as compared to $8 billion inflows in the previous quarter, BofA ML said in the research note. This is the third consecutive quarter when the Indian markets have seen significant flows from the FIIs.
In contrast to FIIs, domestic mutual funds sold Indian equities with an outflow of $1 billion in the (October- December 2012) quarter and the January-March period.
A sector-wise analysis shows that FIIs remained bullish on utilities, pharma and software this quarter. However, they were bearish in sectors such as real estate and energy.
Meanwhile, LIC sold shares in sectors such as software, financials and pharma, while it bought in sectors such as metals, mining and utilities.
According to the report, the analysis for LIC is an approximation, as only those stocks where their stake is greater than 1 per cent were taken for consideration as that is the only data publicly available on the exchange Websites.