Foreign portfolio investors (FPI) pulled out ₹11,000 crore from energy, finance and information technology stocks in the second half of March, stated a report by Business Standard.
Quoting data collated by Primeinfobase, the report noted that companies operating in the oil, gas and consumable fuels space saw selling worth ₹4,524 crore, followed by financial services, worth ₹3,346 crore outflows and IT, which saw selling worth ₹3,133 crore.
Meanwhile, Auto ( ₹439 crore) and telecommunication ( ₹268 crore) were the other sectors where foreign investors sold shares, added BS.
Overall, FPIs sold shares worth ₹4,638 crore on a net basis in the second fortnight of March, the report informed.
In the energy sector, the selling was largely in Reliance Industries (RIL), it mentioned, further highlighting that RIL declined as much as 9 percent in March.
“For many of the big IT players, the financial sector accounts for a third of their revenues. The banking crisis in the western world could hurt them," said G Chokkalingam, founder of Equinomics, a Mumbai-based research and advisory firm.
Meanwhile, on the other hand, capital goods, construction, FMCG, and consumer durables stocks witnessed buying in the second half of the previous month.
The report informed that FPIs bought capital goods stocks worth ₹1,731 crore, construction materials worth ₹1,140 crore, and construction company shares worth ₹1,199 crore. Shares of fast-moving consumer goods (FMCG) worth ₹1,103 crore and consumer durables ( ₹850 crore) were the other buys during this period, it noted.
The focus on capital goods and construction was attributed to the government’s thrust on capital expenditure and the production-linked incentive schemes, explained BS. FMCG stocks, meanwhile, were picked up as defensive buying, it added.
"Still, volume growth (in FMCG) is in single digits. In a higher interest-hike scenario, FMCG is the best defensive sector. Maybe FPIs think the rate-hike cycle hasn't peaked," said Chokkalingam.
Despite the selling, the highest sectoral allocation was to financial services firms at 33.5 percent, up from 33.07 percent in the previous fortnight. IT (10.97 percent) and energy (10.11 percent) were the other sectors with high FPI allocation.
