Sectoral Shifts- The Unspoken Truth of Making Money....

 

"Those who cannot change their minds cannot change anything."

                                                                - George Bernard Shaw..

This blog is dedicated to all, but specifically to those who are using the basic tools of fundamentals and technical analysis in the market and still not getting desired returns from the stock market. 

In last few blogs, we noticed the volatility of the stock market and how big players / smart money playing the role in roller coaster ride of stock market, creating the fear factor in retail investors. In the previous weekly options expiry of Nifty (every Thursday of the week), we saw index in the green but all the stocks were in the red. We also noticed that the Nifty is not letting go the important levels. Bulls and Bears are literally fighting to the death for the dominance on the market. In above all, how retail investors can save their own interest is the question as they have every right to protect their own profits in the zero sum game of the stock market. I can say the investor / trader who is experienced one, will not take the risk and will book the profits after they are reaching the desired profits or they must be using some technical parameters to decide the same. But how to maintain profits going and not losing to market volatility is what I am going to discuss in this blog.

The very basic important characteristic of the money is MONEY IS NEVER STAGNANT. Money keeps changing the direction with the opportunities in the market, then be it on stock level or industry level or sector level or asset level or at country level. Money always keep moving on DAILY basis. We can closely monitor the movements of the money to make money in the stock market, and believe me you will never get disappointed by doing so. 

I am personally tracking the sectoral movements of the FPIs since few years now, the movements not only helps in investing in right direction but also suggests entry and exits of the stocks. To begin with let's see below the sectors and the percentage allocation of each sector in Nifty 50, the data is as on last trading day of previous month.

source: www.nseindia.com.

This information is very generic and most of the retail traders/ investors knows the above figure. But what most of them misses out is the percentage allocations in the above figure along with the sub sectors, they keep changing every fortnightly and NSE publish them on monthly basis. Even sectoral change data of FPIs are getting published on fortnightly basis, when the shifts are happening on daily basis. There are few sites which provides that data on subscribing to the site but I will not mention anything here as I am not promoting anything. 

Lets see the publically available previous data from NSDL site which shows the fortnightly sectoral shifts in the stock market. 

                                                                 Table 1.  Source: NSDL

I have highlighted few rows as I want to give the data points on the selected sectors. If you observed closely, the Green and Red highlighted sectors are outliers while orange is nominal but interesting data.

Considering the highest growth in AUC within fortnight, in the period of 15th Jan 2024 to 31st Jan 2024  FPIs 6% of overall distribution goes to Telecommunication sector. Correlating this data in the market cap wise stocks of telecommunication sector, let see below table:

                                                              

                                                                            Table 2.
 

In above table I have mentioned the prices after the data was published on NSDL sites. Above data explains all. With the volatility in the market this sector has shown the promising growth to depend on. 

Considering the second best sector which is Oil & Gas, data shows similar behaviour. 

                                                                            Table 3.

The most negative sector for the mentioned period was Media entertainment & Publications where FPIs reduced the funds by almost 15%. The same is replicating in the stocks.

                                                                            Table 4. 

We can clearly see that top market caps from the sectors are reciprocating to negativity. 

The Forest material sector is the one where we can say that there might be ongoing sectoral shift, for that I will share the extra data for the sector from my records. 

Table 5.

Clearly from Table 1 we can see that FPIs are positive by 2% but table 5 shows complete negativity. 

Below table shows that forest material sector in last 6 months received around 11% of FPIs moneyflow while the last fortnight suggests the sector wide negativity. 

From the above data, the signals are pretty clear. One who is depend on Fundamentals and Technical analysis will definitely gets the aid of this data to take the necessary calls. 

The above data once again proves that not just stocks but whole sectors dances on the tune of FPIs.

That is it for this blog, I hope you all have got little different insight from above data.

Open to every single feedback, critics, suggestions for the above data, please put them in the comments. Let's grow together......

Disclaimer: 

1. This data is for your information only. I am not recommending any transaction in any segment of the Stock Market here. 

2. The above stocks are selected on the basis of their market capitalization in their respective segment only. Kindly do not take any position based on any of the above shared data. Kindly do your own analysis and consult your financial advisor. 

3. The data mentioned are available publically, you can cross check on your own. 

4. These are all personal readings and observations based on the personal data records, I may be completely wrong on above data.

MUTATIO IN DOMINATIONE in Indian stock Market?

Hi All, 

I am sharing the blog after almost 6 Months. I was forced by data to write the blog, specially the volatility.

All those who are traders knows that there is only one true god of the market VOLATILITY, the trader who understand the volatility are the those 10% traders who make the money in the stock market. SEBI made sure that everyone focuses on 90 % of the failed traders with very great intention to protect the money of retail investors. Now a days we see the disclaimer after opening our any trading platforms. 

Concept of volatility is the most complex parameter in the stock market followed by liquidity. I am not writing any of the topic in details but here my intention will be to touch upon the data points which suggests the market movements beyond the conventional fundamental and technical study of the market. In this blog I will try to cover the dynamics of the current Indian stock market with few data points.

We all know, that there are 4 main players of the stock market, I have mentioned in my previous blogs also. They are FPIs, DIIs, Prop Desk, Clients (Retail Investors). We will understand the assets under each of them with the help of following table.

source: NSDL, FPI monitor, category wise AUC data. 

The above data table gives the allocation of the all the players in the Indian Equity market. Among them you can clearly make out who is the boss in the India Stock market. Here I will not give the categorisation, as you all readers can figure that out.

Another data suggests that FPIs holds 21% of overall holdings in the companies which makes NIFTY 500 while DIIs hold 14% all all shares in holdings. 

These figures leads to another question that if the FPIs are only controlling the market then now a days, how come the volatility has risen to highest level? I would like to give the honest answer based on the data I gather on daily basis by tracking the big players movement in the market. This conclusion of mine can be completely wrong but yes there is bright chance that the conclusion is correct based on data points given below.

Among the FPIs, I am presenting top 10 countries with asset under custody (only equity), the data is for Dec 23 and Nov 23. Latest data for Jan 24 is not yet available. 

              Source: NSDL, Countrywise AUC data.

Referring the above table we can clearly see the US FPIs are holding the highest assets under their custody, that means AUC USA= 2.85 X (AUC of Luxembourg+AUC of Singapore) who are 2nd and 3rd highest asset holder under their custody.

In my view, Singapore, luxembourg, Japan FPIs are SUPER bullish on the Indian Stock market along with others. US FPIs are also showing that they are positive on Indian market, but now they hold more power to control the Indian stock market, as SEBI has removed the restrictions on SHORT positions in the market. It has been observed in the past that DIIs are the bulls while specifically US FPIs are the big bears of the market. This time singapore, luxemburg, Japan FPIs along with other fpis also have joined BULLs gang, cornering US FPIs to counter the game of shorts they play in consolidation phase of the market. Past records shows that market has showed sideways moves before central elections. 

Considering that very same thing big players can only make the profits by shorting the market in Futures and hedging it with CASH. So we are observing the following data of FUTURE POSITIONS of the big players. 

                                               Source: www.nseindia.com

The above data suggests that FIIs are currently carrying 1,44,454 Future Index short positions while only 69,557 Future Index long positions. Surprisingly DIIs too are carrying 90258 Future index Short positions and only 56219 Future index long positions but in my opinion they are hedge for the tremendous cash buying they are doing in the market currently.

By just shorting the futures index, can US FPIs pull down the market against 3 other big players? Especially they know the INDIA GROWTH Story? 

:-Yes, they can do so by selling in CASH market whenever is required. 

For last calendar year, FIIs are net sellers in cash segment with selling of -43,757.2 INR Crores while the whole credit goes to Diis for their net buying in cash segment with buying of 1,36,152 INR Crores. The selling of Fiis is not at all worrisome as it is well within the limits of consolidation state of the market.

For this calendar year, Fiis are already negative with -35977.87 INR Crores and Diis are positive  with 26743.63 INR Crores, this data is for Jan 2024 only. 

Considering the data above, I can say that there is well expected TUG OF WAR in Indian stock market before elections, which gives the reason for High Volatility in the market. Indian stock market since March 2020, when Nifty touched 7500, has not seen the negativity and Index has grown almost 3 times in last 4 years. Macro economically India Story still has gas left, but one way up market is always alarming. Taking caution in these situations is never harmful.

The sharp moves in the market currently covering 200-400 points on Nifty in single trading session is indicator that match between big players is for domination on Indian equity market. This market is showing the deadly mood swings even in Intraday covering 60 to 100 points in just 5 minutes, which previously was a day movement. 

With this I will conclude today's topic that, small investors/ traders like you and me should follow the strict rule of profit booking and stop losses in current market. It is not wise to have FOMO in this current market. I am not saying that market can turn super bullish or super bearish but It will be welcoming move if the market shows healthy dip. Which eventually may suggests consolidation phase for a while. 

Open to all the suggestions/ Critics/ Praising to this information. Kindly share your thoughts in comment section.

DISCLAIMER: All the data given above is available in public domain, I have mentioned the respective source of the data. This is personal opinion based on data records which I maintain. This information is strictly for your information only. There is no suggestion of any transaction in any segment of the market. 

STALKING FIIS- JUNE 2023 DATA-- THE DATA OF BULLS.....

Hello Everyone,

It is said that Fundamental followed by Technical analysis suggest the perfect directions about the stocks/ indices. Let's add one more parameter in it, LIQUIDITY. This liquidity has gained immense attention in past few years and it will grow as more and more in coming years for sure.

Keeping the same respect to the basic analysis of Fundamentals and Technicals, we need to keep the eye on Liquidity as it is deciding the market moods now a days. Now if you are keeping the eye on liquidity you need to keep the track on money flow of all 3 segments that are Cash, Future and Options. Market swings according to money flow in these segment in ultra short term and short term basis. For long term market only knows one direction, that is UP... 

It is well known fact that market never follow same direction for long, Nifty made a low of 16945.05 on 24th March 2023 and has not looked back. We are now on 19457.3 on closing basis of 7th June 2023. Which is the rally of 2552.25 points, which are 15% in just 3 months time. Now this is really a wow factor but is this something we should fear of as market is not following the fundamental rule and dancing on the tune of liquidity which is provided by FPIs? or genuinely we are in BULL RUN? Can it be a election year EUPHORIA? Where are the news now of UKRAINE WAR and World Recession?  These are some very logical questions come into the mind and then the real question comes and that is,

ARE EVEN FUNDAMENTAL AND TECHNICAL ANALYSIS EXISTS OR ONLY LIQUIDITY CONTROLS THE MARKET?

The big fish who controls the money flow are FPIs that I have already mentioned in my previous blogs. Throwing some light of their activity in the month of June 2023. 

June Data suggests that FIIs bought around 27250 Crs while DIIs added up 4458 Cr on net basis. (source www.moneycontrol.com). Money flow from FIIs is positive since March 2023, and in May they invested 27856 Cr. in cash segment and DIIs were net seller with INR -3306 Cr. worth net selling in Cash segment only.

FPI AUC COUNTRY WISE (TOP 10) DATA:

Below are the TOP 10 Country wise FPIs data. We can clearly see the money flow which is coming to India all across the globe. Clearly with this data, India has become Seventh heaven for investments. Maximum inflow we can see from France FPIs where minimum is from Mauritius FPIs (in percentage terms per month basis). 

This data is really comforting as far as the market movements are concerned. Now only the question is What has changed suddenly in last 3 months that all smart money is getting diverted to INDIA? 

We can not deny that there is rush to complete the govt. project before this year end which will replicate in the election next year. The impact will definitely pass on to private players who are giving the services to govt. so in cascading effect we are sensing the corporate earning growth for sure. On top of it the report from bloomberg says that there is 0% probability that INDIA will go in recession. Now that is really promising. 

SECTORAL SHIFT OF SMART MONEY from 15th June 2023 to 30th June 2023:

Utilities sector is clearly gaining the attention of smart money, followed by construction, financial services, FMCG and telecommunication. Below table suggest the percentage change in last column.

Below table is of TOP losers for the mentioned time frame.

Contradiction in above data if you notice is about construction sector where it is top gainer with around 6%. while Construction Material sector is in top loser list. Is CONSTRUCTION Sector will be on losing side here onwards? This is the thought to discuss. 

With all the above data, Are we in BULL RUN AGAIN OR IT IS JUST EUPHORIA? Let me know your thoughts in comment section. 

 

STALKING FPIs- Fortnightly Sectoral Shifts

 Hi all,

To keep informing you about the Smart money movement, adding another chapter of FPI Fortnightly movements. The reference data point should be previous blog of same category which was published on 10th June 2023. 

FPI AUC Country Wise Data:

Previously we saw the monthly % change data for top 10 FPIs investing in India for 6 months period. This data gets updated on MONTHLY basis so this time, data is not available. In next fortnightly blog I will include the data points and changes.  

Sectoral Shift of Smart Money for last 15 days:

Sharing Top 9 top sectorwise gainers and losers on the NET equity basis: 

Telecommunication, Construction, Consumer Durables, Capital Goods are surely maintaining the momentum and looks like favourites of smart money. Last month also there was incremental percentage change (ref. to last blog). In previous month we saw that IT was gaining the momentum but IT sector outflow is noticeable in last 15 days along with the degrowth in metals and mining sector on net basis.

Below are the tables which shows the top gainers and losers on AUC (Asset Under Custody) basis. 

* Mean calculated as 3% of percentage change calculations. 

Same conclusion on AUC level movements too. On AUC level Automobile and power sector looks positive too but not like previous one. Smart money is clearly focusing on the HealthCare sector, we can observe the up move on Net Equity as well as AUC level..  

Cash (Equity) Money Flow of FIIs: 

Sharing the money flow of Fiis and Diis from 1st June 2023 to 15th June 2023 as we are discussing the data on fortnightly basis:

DIIs are also Bullish along with FIIs. Effective cash (equity) moneyflow for 15 day combiningly is around 9541.41 Crores.

Lastly, connecting the dots, Market (NIFTY) missed ATH (all time high) by just 1 point. With this kind of inflows, HOPES are still on for the market to record new ALL TIME HIGH.... 

Leave your thoughts in comments.. Share your views, questions, ideas below. Let me know If you are getting some different perspective with above data...   

**Disclaimer: These are all personal data analysis from the data available in public domain, There is no suggestion of any kind of trade/investment, in any segment in any underlying assets in this blog.Sawari apne saman ki khud jimmedar hai... 

Source of this Data Analysis: NSDL FPI monitor. 

STALKING FPIs- Data For last 2 months

Hi All,

First Blog of this Blog series,    

Covering 1st Data Points and analysis: 

Country wise FPI AUC data activity (Monthly):

Referring to below table, Top 10 FPIs as per the size of investment is given below. This data gives the idea that who all are investing and how much. All the figures in Month column are INR in Cr. While Monthly percentage change data is in Percentage. 

Points to notice:

1. USA FPIs have invested around Rs. 20.47 lakh Crore. in May 2023. US FPIs are clearly dominating the Indian Stock market as per the data

2. Luxembourg, Ireland, Norway, France and UK combining Ly calling as UK FPIs have invested in total Rs.11.48 Lakhs Crores. in May 2023

3. Singapore FPIs have invested around Rs. 3.65 Lakhs Crores  in May 2023

4. From above 4 points it is clear that US and UK (combining Ly) FPIs are heavily invested in India than any other countries FPIs.

5. For the months Dec 22 to Feb 23, There was outflow from FPIs, March 23 was neutral and April and May 23 was positive, It looks like cash inflows and cash outflows of FPIs in last 6 months are the same. 

Now relating this data on market levels (Nifty). Nifty has given flat returns or I must say that they are doing the dance on the tune of FPIs. Refer fig. below. 

In the month of Dec 22, the Total Money inflow is Rs. 48,34,447 Crores while in May 23, It is Rs.48,79,628 Crores. which is 0.93% inflow higher than Dec 22 data. 

The market is up by just 0.36% suggesting the neutral Money flow. Consolidation Phase...

*This money flow is not only in Cash segment from FPIs were are considering all the equity related segments here.

I often get the question, why you track the data of NSE (Nifty) and not BSE? the reason is NSE not only manages Cash Segment but also Derivatives segments, NSE data include all indices like BankNifty, FinNifty etc. So NIFTY is the original complex game and not BSE.

Sectoral Shift of the money in last 2 months:

The data below in table 1. is normally getting published after every 20 days. Data suggest that on 15 days the sectorial shifts happens, Table below only covers the money flow of FPIs in different sectors fortnightly in Indian Stock Market.

 

Table 1. 

Table 2:

Table 2 Suggest the sectoral shifts in last 2 months fortnightly, we are observing that 4 sectors that are Telecommunications, Utilities, Capital Goods and Consumer services are maintaining constant or augmenting money flow, While Reality, Construction, Textile Oil Gas and consumable fuel are on loosing side. Meanwhile for the month of May Metals and mining along with IT & Automobile and components sectors showed up the positive money flow.

Now relating all above data with inclining and declining money flow and the stocks from that sectors we see clear winners as below: 

     Table 3.

The above table suggest the top performing stocks from the gaining sectors. You can track the movement of the the individual stocks for last 2 months. This table I am adding in this blog for showing the relevance only, and I will not share it hereafter to avoid speculations.

**There is no suggestion of buying, selling or holding of these above stocks at all. 

How to relate the above data points with your personal stock portfolios? 

If you are watching the sectorial shifts as and when they are published you will understand that whether to hold, buy, sell any stocks from that sector or not. It is hard to select the stock for buying from the 6000+ stock on Nifty but information is easily available anywhere about stocks and its sector. 

I am sure that individual retail investor at least will not loose heavily on any stock. Like to give a example from above data, one should understand to Trim/Exit/Average the positions in the stocks from loosing sectors like Reality, Construction and textile. 

I am not giving any trading idea here but the restructuring or rebalancing of the stocks with respect to the movements of big player will save you from losses.

So NEVER go against the MONEY FLOW OF Big Players. In Hindi there is saying, "PANI MAIN REHKAR MACHALI SE PANGA KYON LENA.."

Leave your thoughts in comment section. 

Please follow the blog to get the notification directly and if you are getting some new information which is appealing to you share it in your circle. Why should Big Player have all the fun of PROFITS? Let the retail investors like you and me also make some PROFITS....

**Disclaimer: These are all personal data analysis from the data available in public domain, There is no suggestion of any kind of trade/investment, in any segment in any underlying assets in this blog. Sawari apne saman ki khud jimmedar hai... 

Source of this Data Analysis: NSDL FPI monitor. 

Happy Investing.... 

INTRODUCTION

 Hi All, Welcome to my new blog series. 

My Intensions towards this blog series is to publish the data which normally common retail investors do not consider while investing in Stock Market. This data can be very powerful tool as far as the individual stock portfolios are concerned. 

Normally Every investors invest with Fund Managers and also maintain individual stocks portfolios. Fund managers are the experts and they have intel of Fund House as well, so leaving that portfolio aside, lets concentrate the individual stock portfolios. 

Management of Individual Stock Portfolios, in India is very haywire. Following are the ways of selecting the stocks in India for personal portfolios:

1. Selection of the stock by following Telegram/ Whats App universities, blindly. 95% of the time telegram groups with more than 100 people will be loosing the the money of the selected stock because they have followed the suggestion blindly. Most of the times these big groups are created to create the buyers for selling from the portfolio clients. These groups simply provide supply for the demand of selling (**there will be always exceptions to everything), so the buyers from such group acts as dumping ground for big sellers.

2. Most of the times, the stock buying is result of Monkeys Whisper, and we do not know the rationale, fundamentals, technical or even any speculation while buying. 80% of the time this type of selection fails, because no cross check happens while buying the stocks. This type of selection also can give hit ratio of 80% for profits if the information is from trusted source and backed with rationale, fundamentals and/or even speculations but it is totally gamble and depend on the luck if you have such source or not.

3. Few who have some knowledge smartly manage to copy the common stocks appearing most of the funds/ PMSs/ Small cases in personal portfolio, duplicating the stocks without knowing the risk to reward ratio, horizon and the price to buy or sell. 70% of the time this type of selection fails as investor buy the stock duplicating the same stock but most of the time they do not track the changes (rebalancing or restructuring activity in the folios from where they have copied). If they manage to even restructure or rebalance according the the fund/ PMS they are following, it is just a duplication of the same stock with extra transaction cost. This may lead to liquidity crunch when better opportunity comes. It is of course personal choice but yes COST is important factor in everything.

4. Investors (Not Fund managers or Equity researchers) who are associated with Finance or Financial Services or investors who learned the analysis, do there own study and work on fundamentals and technical of stock best in their own capacity. The hit ratio of selection of the stock in this case is quite higher than the previous types of selection of the stocks. Still I can say 45% room to increase the profitability as market never follow single rule, that means Fundamental and Technical are basic studies of the market, market gets driven by either of them at a time, not both at same time. There are another very important drivers of the market, SPECULATIONS and LIQUIDITY.

5. News based buying, No comments of this type of selection of the stock, I am sure everyone has done this and experienced the results. leave your thoughts and experiences in comments if you can..

One can definitely increase the percentage returns of the INDIVIDUAL STOCK PORTFOLIOS by doing 5 simple steps mentioned below:

1. Knowing the individual Risk Appetite while selecting the stocks.

2. Knowing the powerful concept of Money Flow.

3. Knowing WHY to Buy and WHY to exit. 

4. Knowing the activities of Big Players. It can be stock specific or It can be Sector Specific.

5. Maintaining the discipline in keeping stop loss as well as in booking the profits with respect to the changes happening with the money flow in that stock specific sector. 

Now, If you further dig down, you realize that the stock market is like Rabbit Hole, one can not have everything at once, something or other will be missed for sure. But there is smart way to tackle this situation, specially for common people who do not understand the fundamentals and technical analysis. That is POINT NO. 2, Tracking the money flow.

TRACKING MONEYFLOW:

I came to conclusion that tracking money flow is the smartest way to manage the individual portfolios, but it leads to another question : whose money flow?? lets find out below:

People who knows me and tracking my blogs know this for sure but for everyone, there are 4 Categories of the investors in the market. 

1. Clients: This type includes all the retail investors including HNIs.

2. DIIs: Domestic Institutional investors, this type includes institutional investors like, mutual fund houses, banks, insurance firms and others etc.

3. Proprietary Desk (Prop Desk): They are financial institutions, investment bank, brokerage house who are registered with authorizing body of the country (SEBI in India) and they invest in the financial instrument WITH THEIR OWN MONEY not sharing profits to anyone else. Normally they are active more in Derivatives Segments than cash segment. Banks and Financial institutions can register under this category by creating separate desk.

4. FPIs: It includes foreign portfolio investors, Foreign Institutional Investors, Qualified Foreign Investors (QFIs) and sub accounts under QFIs. 

Out of these, 4th category that is FPIs category is the one who have maximum money in India Stock Market, Followed by Prop Desk and DIIs. That is why we normally hear every time about FIIs and money associated with it. 

Here in this blog series, I will try to publish the money flow data of FPIs who are the biggest investors in Indian Stock Markets and who drives the Indian Stock Market. This will include, Fortnightly Sectorial Shifts of money flow in the Indian Stock Market, changes in country wise AUC (asset under custody) data of FPIs. This data will be useful for those who are holding certain stocks and want to align the individual stock portfolio with respect to the activities of the big players (FIIs Only). There will not be any stock buying or selling recommendations in this data. Any stocks which I will be mentioning is with respect to the sectoral money flow and their past performance with it. Past performances is not driver of future performances of the stock so do not trade or invest with this data..

Please Follow the blogs to get the updates each time and share it in your circle if you find the blog series interesting and different than conventional theories of investments....

HAPPY INVESTING.......