FIIs Turn Buyers In Financial Stocks, Invest ₹6,535 Crore In The First Half Of August

Foreign institutional investors (FIIs) sharply changed course on Indian financial stocks in the first half of August, buying a net ₹6,535 crore after selling ₹2,669 crore in the final fortnight of July. The ₹9,204-crore turnaround made financial services the biggest focus of foreign buying during the period.

Total net sectoral inflows rose to ₹16,618 crore between 1 and 15 August, from ₹4,642 crore in the preceding fortnight, according to NSDL data. The buying, however, remained selective. Financial services, automobiles and consumer services together accounted for ₹14,338 crore of the inflows. Telecom, capital goods, power and real estate saw continued foreign selling.

Financial Stocks Lead Foreign Buying

Financial stocks accounted for nearly 40% of total net sectoral inflows during the first half of August. The sector attracted ₹7,260 crore in June after recording ₹12,303 crore of outflows between March and May.

Automobile stocks were the second-biggest beneficiaries, with foreign investors putting in ₹4,405 crore, up from ₹2,372 crore in the previous fortnight. The latest buying has not yet reversed the longer-term trend, with cumulative foreign outflows from autos reaching ₹35,739 crore over the previous five months.

Consumer services attracted ₹3,398 crore, compared with ₹2,840 crore in the second half of July. The sector had already received ₹11,370 crore over the previous two months.

Other Stocks Attracting Foreign Investors

Healthcare and information technology (IT) stocks received ₹2,910 crore and ₹2,530 crore, respectively. Consumer durables attracted ₹1,472 crore, though that was well below the ₹4,958 crore invested in the previous fortnight.

Measured against assets under custody, consumer services saw inflows equal to 1.23% of its previous assets under custody. It was the highest among sectors and marked the third straight period in which consumption-oriented sectors led on this measure.

Autos followed with an increase of 0.82% of previous assets under custody. Consumer durables, IT and healthcare recorded increases of 0.74%, 0.64% and 0.55%, respectively.

Foreign investors also turned buyers in metals and oil and gas stocks. Metal stocks received ₹720 crore after an outflow of ₹1,056 crore in the previous fortnight. Oil and gas stocks attracted ₹490 crore after ₹513 crore of selling.

Telecom Remains Under Pressure

Telecommunications recorded the biggest foreign outflow, with investors selling ₹3,322 crore of shares. The outflow was slightly higher than the ₹3,271 crore recorded in the previous fortnight. Telecom stocks have seen ₹24,530 crore of foreign selling since January.

Capital goods posted the second-largest outflow at ₹1,556 crore, although selling eased from ₹3,618 crore in the previous fortnight. Power stocks saw an outflow of ₹1,164 crore, followed by real estate at ₹1,014 crore and construction at ₹404 crore.

Power and other capital-intensive businesses face long investment cycles, execution risks and uncertainty over project costs, while other sectors have attracted foreign flows on the basis of liquidity, earnings visibility and defensive characteristics.

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