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MARKET EYE-High FII holding makes pvt banks vulnerable after Fed-analysts
June 20, 2013 / 5:33 AM / 4 years ago

MARKET EYE-High FII holding makes pvt banks vulnerable after Fed-analysts

* Shares of large cap private banks fall as traders fear that
high foreign holding in these stocks makes them more vulnerable,
as a sell-off after the Federal Reserve heralded an eventual end
to free money.
* ICICI Bank Ltd, with 37.94 percent FII holding,
falls 4 percent, while HDFC Bank, where FIIs hold
34.07 percent of total shares, is down 3 percent. 
* "A liquidity squeeze by Fed if US economy grows will obviously
reduce the flows that were coming to EMs like India, making
stocks with high FII holding vulnerable for the short term,
analysts say.
* Traders also worry an end to the U.S. monetary stimulus could
lead to portfolio outflows, pushing the rupee lower
and, in turn, delaying any rate cuts from the Reserve Bank of
India. 
* Multiple analysts, however, say that they would look to add
high-quality- large-cap stocks in such a fall. 
* Asian markets buckled badly on Thursday after the Federal
Reserve heralded an eventual end to free money and China turned
the screw on credit even as factory activity in the world's
second largest economy hit a nine-month low. 

 (abhishek.vishnoi@thomsonreuters.com /;
abhishek.vishnoi.thomsonreuters.com@reuters.net)

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