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FII holding in Nifty 500 stocks sinks to 6-quarter low amid sell-off

The decline came amid concerns over rich valuations of Indian equities relative to other global markets

Mumbai / January 27, 2022 / 02:02 PM IST

Shareholdings of foreign investors in Nifty 500 index companies nosedived to a six-quarter low in the three months ended December after they withdrew almost $5 billion from the Indian equity market, Motilal Oswal Financial Services said in a report.

The holdings of foreign portfolio investors in Nifty 500 companies fell to 20.9 percent from 21.5 percent in the September quarter, an analysis of shareholding data showed.

FPI holdings in Nifty 500 companies declined for the fourth consecutive quarter amid concerns over rich valuations of India equities relative to other global markets. This led them to trim their holdings for better opportunities elsewhere.

The decline was also in contrast to market expectations that a selloff in Chinese technology stocks due to government intervention would nudge foreign investors to shift their funds to Indian equities.