Foreign funds took a shine to Indian Sensex companies in the third quarter and increased their exposure to 17 blue-chip firms, including Tata Motors and ITC, which analysts have primarily attributed to attractive valuations. Auto giant Tata Motors’ FII holdings increased the most during the quarter under review, rising by 2.26 percentage points to 24.14 per cent, while FMCG firm ITC also witnessed a substantial 1.05 percentage points increase in FII holdings to 16.31 per cent.
The other blue-chips in which FIIs have upped their stake are Infosys (0.7 percentage points), HDFC Bank (0.37 percentage points), HDFC (0.79 percentage points), TCS (0.6 percentage points), Bharti Airtel (0.38 percentage points), ONGC (0.12 percentage points) and HUL (0.98 percentage points).
In addition, FIIs consolidated their stakes in NTPC (0.23 percentage points), Wipro (0.66 percentage points), GAIL (0.05 percentage points), Tata Power (0.03 percentage points), Maruti (0.11 percentage points), DLF (0.4 percentage points), Bajaj Auto (0.14 percentage points) and Sun Pharma (0.35 percentage points).
The increased flow of dollars into the Indian economy has strengthened the rupee which had virtually gone into a free-fall. The depreciation of the rupee had also led to a sharp increase in the country’s import bill.
Falling inflation has raised investor hopes that the RBI will ease its tight money policy and inject more money into the system.
Lack of better investment opportunities elsewhere is also leading to a channeling of FII investments in India as the economy is still expected to grow at close to 7 per cent.
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