FPIs sold Oil & Gas, Construction, IT sector stocks the most; highest inflows seen in realty stocks

Foreign portfolio investors (FPI) have turned net buyers in the Indian stock market during the month of June 2024. After heavy selling of over ₹34,000 crore in April and May, overseas investors bought Indian equities worth more than ₹12,000 crore this month so far.

However, for the first fortnight of June, FPIs remained net sellers in domestic markets, as their total outflows stood at ₹3,064 crore. In precise, between June 1 and 15, FPIs were sellers to the tune of ₹12,519 crore across 11 sectors, while they infused funds worth ₹9,455 crore in 12 sectors, data from National Securities Depository Ltd (NSDL) showed.

Sunil Damania, Chief Investment Officer, MojoPMS believes FPIs have altered their position in the equity market following the election results. According to him, there are three primary reasons for this positive inflow.

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“First, the continuity of the government assures ongoing reforms. Second, the Chinese economy is decelerating, as evidenced by a 12% decline in copper prices over the past month. Third, certain block deals in the market have been eagerly taken up by FPIs. However, these FPI inflows are concentrated in a select few stocks rather than being widespread across the market or sectors,” Damania said

He believes that FPI inflows will remain constrained due to the high valuations currently commanded by the Indian equity market.

Meanwhile, the highest FPI outflows was witnessed in the Oil, Gas & Consumable Fuels sector worth ₹3,683 crore during June 1-15. The sector saw FPI selling to the tune of ₹5,554 crore in May.

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It was followed by ₹2,660 crore-worth FPI selling in the Construction sector during the first fortnight of June, after outflows worth ₹2,686 crore in the previous month.

FPIs offloaded IT sector shares worth ₹2,559 crore and metals & mining sector shares of ₹1,861 crore. They had sold IT sector shares worth ₹5,802 crore and metals and mining shares with ₹953 crore in May, as per NSDL data.

“FPIs are selling where valuations are high and buying where valuations are reasonable. The buying in the debt market continues. These broad trends in the market are likely to continue,” said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

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On the contrary, the highest FPI inflows was seen in the Realty sector at ₹1,815 crore, followed by buying worth ₹1,736 crore in Telecommunications sector. FPIs infused ₹1,607 crore in the Consumer Services sector during June 1-15.

Overseas funds also turned net buyers in the Services sector with ₹1,184 crore-worth inflow, while Financial Services saw FPI inflows worth ₹1,008 crore in the first half of June.

The Assets Under Custody (AUC) of FPIs in the Indian stock market as of June 15 increased to ₹69.97 lakh crore from ₹66.40 lakh crore as on May 31.

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