FPIs withdrew nearly Rs. 29,000cr from these sectors in October
In October, foreign portfolio investors (FPIs) pulled out Rs. 28,933 crore from equities in the Indian stock market across eight sectors, as reported by the National Securities Depository Ltd (NSDL). The surge in US bond yields and worries about prolonged high-interest rates led to a risk-averse atmosphere on Dalal Street. Financial services, information technology, oil & gas, power, fast-moving consumer goods (FMCG), construction, consumer durables, and healthcare experienced the most FPI selling.
Financial services and IT sectors were hit hard
The financial services sector saw the largest FPI sell-off in October, with Rs. 11,804 crore withdrawn, a stark contrast to the net purchase of over Rs. 2,800 crore in September. The Nifty Financial Services index dropped 3% last month. Information technology was the second most affected sector, with FPIs selling Rs. 3,262 crore worth of shares, compared to net purchases of Rs. 1,886 crore in September. The Nifty IT index fell nearly 4% in October.
Oil & gas, power, and FMCG sectors witness selling too
Fluctuating crude oil prices due to geopolitical tensions in Israel influenced the oil and gas sector, resulting in FPIs selling over Rs. 3,000 crore worth of shares. The power sector experienced FPIs net selling shares valued at Rs. 2,869 crore in October. FMCG continued to be unpopular among large investors, who sold stocks for the third consecutive month, with FPIs net selling shares worth Rs. 2,792 crore.
Will the sell-off continue?
With rising bond yields being the primary cause for FPI selling and their recent reversal, some market experts predict that selling may decelerate soon. As told to ET, VK Vijayakumar, chief investment strategist at Geojit Financial Services, stated, "FII selling is likely to be subdued, and they may even turn buyers, not to miss the rally in the Indian market." He added that frontline banking, automobiles, capital goods, and mid-caps in IT and real estate are expected to perform well.
