Anil Singhvi: Markets will see more selling in stocks where FII holding is higher

Zee Business Managing Editor Anil Singhvi said that markets have witnessed selling to the tune of Rs 11000 cr in last week. FII’s have been selling in markets since Feb 22nd 2021. Last week, Friday data, indicated Rs 8295 cr worth of selling by FIIs. Selling by FIIs is the only negative for the markets today, as they have been selling for the past few sessions, said Singhvi. It is important to monitor the the trend continuously now.

Singhvi indicates that last week FII sell data indicates the trend has been quite negative. However, the positive thing is, FII positioning in index long has reduced to 61% from 76%. FII’s don’t go long over 80% and they don’t let it fall below 60%, said Singhvi. In FY20, Index long figures reached 40% - 42% in Feb – March. Last week, looking at Friday’s selling from FII’s indicates that major selling has already been done by them.

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Singhvi said that the sentiment on the market is extremely positive today and whatever selling has been done at higher levels can be bought again today. FII selling in Indian markets is a bigger risk when compared to Global risks, says Singhvi. Domestic Mutual Funds have not been buying into markets for the past 6 months. Even after sharp fall witnessed in the last session, DII bought stocks worth only Rs 1500 cr. DII’s may have limitations to invest even if the valuations are better as there could be more redemptions or SIP’s flows are drying up.

FIIs हुए बियरिश....DIIs हुए बुलिश !

अनिल सिंघवी- FIIs की ज्यादा होल्डिंग वाले शेयरों पर रखें नजर#EditorsTake #FIIs #DIIs @AnilSinghvi_ pic.twitter.com/9oKMs4t0fA

— Zee Business (@ZeeBusiness) March 1, 2021

Singhvi says the issue is not the liquidity concern that happens between FIIs and DIIs, it is important to understand that FII’s reduce index long positions when they reach near 80% and avoid selling when they reach near 60%. Domestic Funds are not strong enough to manage liquidity in the markets. Domestic Mutual funds would have done buying in midcap and small cap funds in Friday’s session; this was the key reason why strong large cap names saw sharp dip in that session. Investors will see more selling in stocks where FII holding is bigger like Shriram Transport Finance. These stocks will see sharp fall when compared to stocks where FII holding is lesser.