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Foreign investor's stock holding in India touches $630 Billion! Where is Nifty headed to?

Good Morning, Everyone, We saw Nifty hitting a record high yesterday closing strongly above 17800. Even as foreign funds are getting jittery about the domestic market due to the steeply higher valuation amid the massive market rally, their holding in the domestic equities rose to $630 billion as of August, according to an American brokerage report.

As of June this year, the value of FII investment was only $592 billion, which means that as the market rallied frenetically, their holding value jumped by $38 billion even though their net incremental investment was almost nil between this period.

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Global Markets:

US market rebounded from the lows again as investors were relieved at a more dovish stance by the FED on tapering support to the economy and increasing the interest rates. The Dow Jones Industrial Average rose 506.5 points, or 1.48%, to 34,764.82, the S&P 500 gained 53.34 points, or 1.21%, to 4,448.98 and the Nasdaq Composite added 155.40 points, or 1.04%, to 15,052.24.

The number of Americans applying for unemployment aid rose last week for a second straight week to 351,000, a sign that the delta variant of the coronavirus may be disrupting the job market’s recovery, at least temporarily.

Stocks in Asia-Pacific were mixed in this morning's trade, as investors continue to watch developments surrounding China Evergrande Group. The Nikkei 225 in Japan jumped 1.95 percent. South Korea’s Kospi edged 0.49 percent higher. Hong Kong’s Hang Seng index traded fractionally higher. Mainland Chinese stocks traded lower. In Australia, the S&P/ASX 200 fell 0.17 percent. MSCI’s broadest index of Asia-Pacific shares outside Japan traded around 0.1 percent higher.

Indian Market:

Trends on the SGX Nifty indicate a flat to small gap up opening today. However, I will watch 17700 as the next support to Nifty and the resistance at 17800. Being the last trading day of the week we might see some selling by the end of the day. With FII holding increasing in the Indian market, there is a high chance of profit booking, kicking in at any point in time, hence it is time we book partial profits and also add some investment into bonds to hedge the portfolio in case of a fall.

Gold on Thursday declined Rs 597 to Rs 46,672 per 10 grams reflecting an overnight fall in international precious metal prices and rupee appreciation. Silver also declined by Rs 338 to Rs 61,180 per kilogram. In the international market, both gold and silver were flat at USD 1,749 per ounce and USD 22.64 per ounce.

FII and DII data

Foreign institutional investors (FIIs) net acquired shares worth Rs 357.93 crore, while domestic institutional investors (DIIs) net purchased shares worth Rs 1,173.09 crore in the Indian equity market on September 23.

Stock Specific News:

Infosys | The technology company is focused on rapidly resolving the challenges in the income tax e-filing portal by working closely with the chartered accountant community and dedicating more than 750 resources to this project.

Sansera Engineering | The company will list its equity shares on September 24. The final issue price was fixed at Rs 744 per share.

Steel companies | Evergrande Real Estate Group’s debt woes will not affect Indian steel manufacturers as domestic firms do not cater to the Chinese market. Instead, steel majors are hoping to clock record exports this fiscal year, as per reports.

Information technology companies | Technology major Accenture reported a robust revenue growth for the quarter ending August.

Dilip Buildcon | The Supreme Court confirmed the appointment of Dilip Buildcon and VPR Mining Infrastructure as the mine developer cum operator, for the Pachhwara Central Coal Block Mine. The total contract value of the tender is Rs 32,156.04 crore.

Indian Bank | The lender has declared two accounts amounting to Rs 3.16 billion as non-performing and has declared these as fraud and reported to the RBI as per regulatory requirement.

Vedanta | The company will delist its American Depository Shares from the New York Stock Exchange and, will concentrate all trading of shares on the NSE and BSE.

Globus Spirits | The NCLT Principal Bench, New Delhi, has sanctioned the scheme of amalgamation between the company and Unibev.

Aditya Birla Capital | The board has approved an initial public offering by way of an offer for sale of Aditya Birla Sun Life AMC, a material subsidiary of the company. The IPO will be open for subscription by anchor investors on September 28 and will open for public on September 29 and shall close on October 1. The price band for the IPO has been fixed at Rs 695-712 per equity share.


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