FII Sector-Wise Flows: Financial Stocks See ₹23,141 Crore Outflows in May; Services Lead Inflows

Foreign Institutional Investors (FIIs) remained net sellers of Indian financial services stocks in May 2026, offloading equities worth ₹23,141 crore. Although the pace of selling moderated compared to previous months, the sector witnessed FII outflows for the third consecutive month. 

The latest selling follows outflows of ₹30,856 crore in April and ₹60,655 crore in March, highlighting continued caution among foreign investors toward India's financial sector. 

Oil & Gas, FMCG and Auto Also Face FII Outflows 

The selling pressure extended beyond financial services during May. 

The oil and gas sector recorded FII outflows of ₹8,978 crore, following net sales of ₹6,703 crore in April and ₹4,129 crore in March. 

FMCG and auto sectors also remained under pressure, witnessing outflows of ₹3,561 crore and ₹2,532 crore, respectively, during May. 

Meanwhile, consumer-focused sectors and technology stocks continued to see foreign investor selling. IT stocks recorded outflows of ₹1,911 crore, while consumer-related stocks saw net sales of ₹1,995 crore during the month. 

Construction materials, consumer durables, and construction sectors also experienced net outflows, reflecting broad-based caution among foreign investors. 

FIIs Turn Buyers in Services and Capital Goods 

Despite widespread selling across several sectors, some segments continued to attract foreign capital. 

The services sector emerged as the biggest beneficiary, receiving ₹7,204 crore in net FII inflows during May. Capital goods followed with inflows of ₹2,799 crore. 

Metals and mining also remained relatively resilient, attracting net purchases worth ₹6,697 crore, indicating selective investor interest in sectors linked to infrastructure, industrial activity, and economic growth. 

Sector-Wise FII Flows in May 2026 

Source: NSDL 

Read More: FIIs and DIIs Increased Stake by Over 2% in These IT Stocks: Infosys, Birlasoft and More 

What Is Driving the FII Selling? 

Higher US bond yields, a strong dollar, and growing investor interest in artificial intelligence-related opportunities have prompted global investors to reallocate capital. 

Additionally, concerns around moderating credit growth, elevated valuations in Indian financial stocks, and ongoing geopolitical uncertainties have weighed on sentiment.  

Banking and financial services companies, which account for a significant portion of benchmark indices, have consequently faced substantial profit-booking by foreign investors. 

Conclusion 

FII activity in May 2026 remained largely negative, with financial services continuing to bear the brunt of foreign selling for the third consecutive month. While sectors such as services, capital goods, and metals attracted fresh inflows, broad-based outflows across major sectors reflected cautious global investor sentiment amid evolving macroeconomic and market conditions.