Financial Sector Sees ₹19,150 Cr FII Outflows; FMCG, IT, Telecom, Realty Also Under Pressure

Foreign institutional investors (FIIs) have continued to pull money out of Indian equities despite a sharp market rebound in April. The financial sector has taken the biggest hit, with outflows of about ₹19,150 crore in the first half of the month.

This comes after heavy selling of nearly ₹60,000 crore in March. The trend has not been limited to one segment. Sectors such as fast-moving consumer goods (FMCG), telecom, realty, auto, oil & gas, healthcare and information technology (IT) have also seen steady selling pressure.

Interestingly, this is happening alongside a strong market recovery. Benchmark indices have risen around 8.5% so far in April, while mid- and small-cap indices have gained even more.

Why Are FIIs Selling Financial Stocks Despite Market Recovery?

Selling has been most visible in financial stocks.

FIIs pulled out about ₹19,150 crore from the sector in the first half of April, continuing the trend seen in March. This comes even as banking stocks have moved higher.

The Nifty Bank index has gained around 12%, while the Nifty Financial Services index is up about 12.5% during the same period. This divergence suggests that domestic investors may be absorbing the selling.

Analysts point out that valuations in some large private banks have turned attractive. That could be one reason why prices have held firm despite continued FII exits.

Which Other Sectors Saw FII Outflows?

Selling has been broad-based across sectors.

Consumer services saw outflows of ₹5,336 crore in the first half of April. Healthcare shares followed with ₹4,481 crore of selling. Both sectors had already seen notable outflows in March as well.

Auto stocks witnessed FII selling of ₹3,704 crore, while oil & gas stocks saw outflows of ₹3,352 crore. FMCG shares, telecom shares and realty sector stocks also faced pressure, with selling of ₹2,976 crore, ₹2,492 crore and ₹1,917 crore, respectively.

Technology and industrial-linked sectors were not spared either. IT stocks saw outflows of ₹1,325 crore. Selling was also visible in metal shares and construction shares, with outflows of about ₹1,273 crore and ₹1,198 crore, respectively.

The trend wasn’t limited to large sectors. Data from NSDL points to continued selling in smaller segments such as consumer durables, chemicals and textiles.

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What Does This Mean For Markets Going Ahead?

There is a clear gap between flows and market movement right now.

FIIs have been selling, but the indices have still moved up. Domestic investors appear to be supporting the market, along with some improvement in global sentiment.

If global conditions remain stable, flows could settle. But for now, the continued selling suggests that caution has not fully eased.

The key question is whether domestic buying can keep pace and hold the market at current levels.

Source:

Moneycontrol