FIIs cut exposure in 19 Sensex cos

However,FIIs have increased their stakes marginally in 16 Sensex firms during the June quarter this fiscal and reduced exposure in the remaining 14 companies.

Market analysts attributed the decline in FII holding to challenging macro economic conditions and weakening rupee.

“FIIs are shying away from the Indian firms on concerns of macro economic conditions and depreciating rupee,” CNI Research CMD Kishor Ostwal said.

Interestingly,metal companies such as Hindalco Industries,Tata Steel and Jindal Steel & Power Ltd (JSPL),country’s largest lender State Bank of India (SBI) and drug firm Cipla have witnessed maximum reduction in their FII holdings.

In contrast,FIIs increased their holding in auto stocks such as Mahindra & Mahindra,Maruti Suzuki,Hero MotorCorp and Bajaj Auto. However,Tata Motors was an exception to this category.

The FII holding in Hindalco Industries fell from 30.83 per cent to 28.24 per cent at the end of the July-September quarter and during the same period,FII shareholding in Tata Steel declined from 17.06 per cent to 14.61 per cent.

In addition,foreign fund houses stake in JSPL fell from 23.03 per cent to 21.88 per cent. Besides,SBI has seen a plunge of overseas investors stake by 2.23 percentage points to 8.65 per cent during the second quarter of financial year 2010-11.

Drug maker Cipla saw a fall of 1.16 percentage points to 13.57 per cent and FII stake in Tata Motors dropped by 1.1 percentage points to 21.88 per cent.

On the other hand,overseas investors have consolidated their stake in Mahindra & Mahindra by 2.8 percentage points Hero MotoCorp by 1.13 percentage points,Maruti Suzuki by 0.54 percentage points and Bajaj Auto by 0.13 percentage points.

FIIs shed its holding in country’s most valued firm Reliance Industries by marginally 0.05 percentage points to 17.32 per cent in the second quarter of current fiscal. Meanwhile,the barometer index Sensex crashed by 2,392 points or 13 per cent in the second quarter to closed at 16,453.76 at the end of September.

Mirroring the volatility in the global economy,FIIs were not very consistent while investing in the Indian market. In July,they invested a hefty sum of Rs 8,030.10 crore in the equity market and again infused Rs 485.40 crore in August. In September,they pulled out Rs 158.30 crore,according to the data of the stock market regulator Sebi.

The rupee started tumbling after the downgrade of the US credit ranking in August,2011,amid a real threat of Greece defaulting on its sovereign debt.

The value of the domestic currency versus the dollar slid from 44.40 per dollar in July to Rs 45.50 in August,47.60 in September and 49.30 in October. It touched an all-time low of 52.73 last week.

Other blue-chip firms where FIIs have reduce their stake are — Sterlite Industries by (0.93 percentage points),Bharti Airtel (0.45 percentage points),Jaiprakash Associates (0.73 percentage points),Hindustan Unilever (0.65 percentage points) and ICICI Bank (0.44 percentage points).

Further,FIIs shed stakes in BHEL,Coal India,Infosys,Wipro,Larsen & Toubro,Tata Power and NTPC.

Apart from the 30-Sensex firms,FIIs have cut their exposure to the three listed Indian air carriers – Jet Airways,Kingfisher Airlines and SpiceJet — amid concerns over escalating operational costs because of high crude oil prices,weakening rupee and other factors.

However,overseas investors increased their stakes in DLF,HDFC,HDFC Bank,ITC,ONGC,Sun Pharma and TCS.