FPIs favour capital goods, auto, IT sectors in first half of July; construction, power see outflows

Foreign Portfolio Investors (FPIs) have invested over ₹30,700 crore in Indian equities so far in July 2024, following an infusion of ₹26,565 crore in June. FPI inflows during the first 15 days of July amounted to more than ₹20,700 crore, with significant investments directed towards the capital goods, automobile, IT, and healthcare sectors.

Among the sectors, FPIs recorded the highest inflows in capital goods, totaling ₹3,612 crore during the first half of July. This was followed by ₹2,993 crore in the automobile and auto components sector, according to data from the National Securities Depository Limited (NSDL).

The information technology sector also saw a notable shift, with FPIs turning net buyers and investing ₹2,765 crore from July 1 to 15, a reversal from the net selling of ₹981 crore observed in June.

The healthcare sector also experienced significant FPI inflows, amounting to ₹2,378 crore during the first half of July. Additionally, the metals and mining sector saw investments of ₹1,969 crore, while the oil, gas, and consumable fuels sector attracted ₹1,944 crore in FPI buying.

Conversely, FPI activity in the financial services sector slowed considerably in July, with inflows totaling just ₹471 crore compared to ₹9,170 crore in June.

“A notable trend was the lack of buying in financial services, which partly explains the poor performance of financial services in July so far. If the recent trend of weakness in dollar and bond yields persist, FPIs are likely to continue their buying in the market. Domestic and foreign investors are keenly watching for possible tweaks in the long term capital gains tax in the Budget to be presented on 23rd July,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

In contrast, only four sectors experienced FPI outflows between July 1 and 15. The construction sector saw the largest outflows, with FPIs selling stocks worth ₹902 crore. This was followed by the power sector, which experienced outflows of ₹891 crore.

Additionally, the chemicals and utilities sectors faced FPI selling amounting to ₹118 crore and ₹38 crore, respectively.

Overall, the asset under custody (AUC) of FPI in the Indian equities as on July 15 increased to ₹73.50 lakh crore from ₹71.44 lakh crore as on June 30.

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