Mumbai: After remaining buyers for about five fortnights, overseas investors again turned sellers in the first half of September, with financials, auto, oil and gas and FMCG seeing the biggest selling. Healthcare witnessed the highest inflows in the period, reflecting the defensive tilt in their near-term outlook for Indian equities.
Foreign portfolio investors sold nearly ₹14,116 crore during the first half of September across sectors, compared with buying of ₹13,000 crore in the second half of August and ₹16,621 crore in the first half of August.
"By and large, FII activity has been subdued in recent times, with stock-specific and sector-specific moves being witnessed in the market," said Kranthi Bathini, director of equity strategy, WealthMills Securities. "Long-only FIIs are also staying on the sidelines due to the rise in crude oil prices, inflationary worries and geopolitical issues," he said.
Read more: Will Nifty extend gains to 4th session on Monday? US sanctions on Russia among factors to decide D-Street action
Financial stocks saw the biggest selling at ₹6,204 crore during the period, after FIIs bought ₹3,959 crore worth of the stocks in the second half of August.
They further cut exposure to auto stocks worth ₹2,670 crore between September 1 and 15, after selling to the tune of ₹1,299 crore in the second half of August.
Read more: JioBlackRock CIO Rishi Kohli decodes Nifty’s inflection point after two years of weak returns
"FPI selling in financials and automobiles was driven by both global caution and sector-specific concerns," said Vishad Turakhia, CEO, Equirus Securities. "Financial stocks were hit the hardest because they form a large and liquid part of foreign portfolios, making them the first to be sold when investors reduce risk. Concerns over pressure on banks' lending margins also led to profit-booking."
In automobiles, Turakhia said demand remains healthy, but rising input costs and weaker export conditions have raised concerns that strong sales may not translate into equally strong profit growth.
Power stocks saw selling of ₹1,653 crore during the first half of September, compared with selling of ₹389 crore in the second half of August. Telecom and IT stocks saw selling of ₹991 crore and ₹960 crore, respectively, during the period.
Healthcare stocks attracted ₹2,114 crore of FPI buying, after seeing purchases worth ₹3,021 crore in the second half of August. Construction and services stocks saw buying of ₹930 crore and ₹905 crore.
"In the large-cap space, FIIs have been net sellers in the medium to short term, particularly in August and September. The moves have been positive in healthcare and auto ancillary, while FIIs have been buying domestic-centric sectors," said Bathini.
