FIIs Buying Surges Past ₹38,000 Crore with Financials at the Forefront

Foreign institutional investors (FIIs) significantly ramped up their exposure to Indian equities during the second half of April, injecting over ₹38,000 crore into the markets. This marks a notable shift in sentiment compared to the more restrained flows observed in the first half of the month.

Financial Services: The Foremost Choice with ₹22,910 Crore Inflows

FIIs displayed a marked preference for financial services, investing ₹22,910 crore, accounting for more than 60% of the total inflows. The sector’s weightage in the indices, coupled with healthy credit growth and supportive macro conditions, likely bolstered this investment interest.

Capital Goods Make a Strong Comeback

After facing net outflows of ₹3,019 crore in the first half of April, the capital goods sector bounced back with net inflows of ₹2,944 crore. This reversal suggests a renewed focus on infrastructure development and industrial activity.

Telecom Sector Maintains Momentum

Telecommunications emerged as the third most preferred sector, receiving investments in excess of ₹2,500 crore, up from ₹2,137 crore in the first half. Continued digital adoption, revenue growth, and sector consolidation may have contributed to sustained investor confidence.

Oil & Gas and FMCG Draw Consistent Inflows

The oil and gas sector attracted ₹2,401 crore, driven perhaps by supportive pricing trends and energy demand. FMCG stocks followed closely, receiving ₹2,330 crore in fresh investments, likely due to their defensive appeal in a volatile environment.

Renewed Interest in Consumer, Chemicals, and Services

FIIs revisited sectors that saw selling earlier in the month. The consumer segment drew ₹1,983 crore, while chemicals attracted ₹1,184 crore. Services and consumer durables garnered ₹983 crore and ₹965 crore, respectively, indicating a broad-based recovery in investor sentiment.

IT, Auto, and Metals See Continued Selling

Despite broad inflows, FIIs reduced exposure to the IT sector with net selling of ₹1,385 crore, adding to the significant ₹13,828 crore outflow recorded in the first half of April. Auto and metal & mining sectors also witnessed net outflows of ₹645 crore and ₹574 crore, respectively.

Real Estate and Construction Remain Out of Favour

Construction and real estate stocks experienced continued selling pressure, recording outflows of ₹425 crore and ₹353 crore, respectively. These sectors appear to be under scrutiny, possibly due to concerns around execution risk and inventory levels.

Read More: FIIs Turn Net Buyers in March with ₹11,000 Crore Inflows Post Nifty Rejig.

Conclusion

The data from the second half of April reveals a distinct rotation in FII strategies—marked by strong buying in financials, capital goods, and telecom, and selling in IT and cyclical sectors. This selective allocation reflects a nuanced view of sector-specific growth prospects amid global and domestic uncertainties.

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