Between January and August, foreign investors withdrew Rs 64,932 crore from stocks in the sector.
Foreign investors sold shares worth Rs 7,054 crore across eight sectors in the second half of the month. The consumer services sector recorded the highest overseas outflow of Rs 2,784 crore after inflows worth Rs 4,158 crore in August.
“The FTSE weight-up of ICICI Bank and Kotak Bank in late September would have been one of the factors driving foreign inflows into financial services,” said Sriram Velayudhan, senior vice president, IIFL Securities. .
Velayudhan said the theme of non-banking financial companies gained momentum in September on expectations of rate cuts.
Analysts believe that momentum from China’s recently announced economic stimulus package in late September will influence sentiment here. Dibam Sharma, Founder and Fund Manager, Green Portfolio PMS, said, “The financial services sector is directly correlated with foreign capital flows and given the risk-off sentiment towards India among foreign investors, this sector “We are likely to be in the brunt of this in the coming months.” Sharma said oil and gas may also see a decline in inflows from abroad given the rise in crude oil prices. Fast-moving consumer goods (FMCG) and healthcare continue to see strong foreign inflows worth Rs 3,528 crore and Rs 2,987 crore, respectively. Last 15 days of September.
These investors had allocated Rs 1,372 crore to FMCG and invested Rs 3,652 crore in healthcare in the first half of the month.
“Amid global volatility, foreign investors are increasing their exposure to defensive sectors such as FMCG and healthcare,” Velayudhan said.
In late September, foreign investors bought shares worth Rs 2,000 crore in the real estate, capital goods and services sector.
Foreign investors have renewed their buying interest in the metals and mining sector, buying 3,012 billion rupees in the second half of the month after selling 1,857 billion rupees in the first half of the month. They had sold shares worth Rs 3,773 crore in the sector in August.
“The metals and mining sector is seeing inflows from abroad due to China’s stimulus package as China is the world’s largest consumer of metals,” Sharma said.
Foreign investors sold shares worth Rs 2,312 crore and Rs 1,267 crore in the oil and gas and information technology (IT) sectors in the last 15 days of September.
“The consumer services sector is facing headwinds as demand growth has slowed,” Sharma said. He said the recent tentative rally in IT stocks was mainly driven by liquidity, and that economic uncertainty surrounding the US could negatively impact discretionary spending and ultimately lead to offshoring. said.
Velayudhan said foreign investors usually buy IT stocks in anticipation of interest rate cuts and end up reducing their positions, which is likely to cause capital outflows to the IT sector.
https://economictimes.indiatimes.com/markets/stocks/news/financial-services-draws-most-fpi-flows-in-september/articleshow/114027545.cms