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Foreign investors continued to pare their holdings in select defensive sectors such as energy and consumer staples, while increasing exposure to cyclical and growth-oriented segments like transportation, telecom, and healthcare, according to a report by Elara Securities.
The report stated "FII ownership continues to moderate for most sectors, reflecting a cautious stance". It also added that this reflects a cautious stance amid global volatility and profit-booking after sustained inflows in previous quarters. Sectors such as Energy (-9.3 per cent YoY), Utilities (-10.1 per cent), and Consumer Staples (-7.3 per cent) saw a decline in foreign interest, indicating a rotation away from defensives and high-valuation plays. However, FIIs slightly increased their exposure year-on-year in Industrials (+3.9 per cent), Health Care (+12.9 per cent), Information Technology (+7.9 per cent), Materials (+7.6 per cent), Media (+17.1 per cent), Telecom (+14.4 per cent) and Transportation (+16.2 per cent). The data signals a strategic shift towards sectors with improving earnings outlook and growth potential. In contrast, domestic institutional investors (DIIs) maintained their counter-cyclical buying trend, increasing exposure across multiple sectors. Notably, Consumer Discretionary (+26.4 per cent YoY), Telecom (+5.5 per cent), and Financials (+12.4 per cent) witnessed robust domestic accumulation, underscoring local investor confidence in India's consumption and credit growth story. However, slight softness persisted in Media (-16.6 per cent) and Utilities (-11 per cent), aligning with weak earnings visibility. The report also shared that the public shareholding trends also reflected mixed retail participation. Retail interest surged in Media (+19.6 per cent YoY) and Real Estate (+19.7 per cent YoY), supported by broader midcap optimism. On the other hand, participation moderated across Telecom (-18.9 per cent), Auto (-7.8 per cent), and Materials (-10.7 per cent), indicating selective retail rotation. Overall, the report noted that the combined ownership trends highlight a stable promoter base, rising domestic institutional dominance, and rotational retail behaviour, resulting in a more diversified and balanced market ownership structure across sectors. (ANI)
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