The selling phase by foreign investors has not stopped. If we look sector wise, the biggest impact of the indifference of foreign investors has been seen in the financial sector or rather the banking sector. From where he has withdrawn more than Rs 19 thousand crores. If we talk about overall, then in the first fortnight, FPIs have sold more than Rs 48 thousand crore from the stock market. Sold Rs 5,338 crore from consumer service sector and Rs 4,481 crore from health service.
Other major sectors from where a lot of money came out include automobile and auto components (3,704 crore), oil and gas (3,352 crore), and FMCG (2,976 crore). Selling pressure was also seen in telecom, real estate, IT and construction sectors, but it was much less as compared to other sectors. In contrast, only a few sectors, such as power (601 crore) and utilities, saw modest inflows, indicating selective buying despite the overall market decline. According to NSDL data, foreign investors sold Indian shares worth Rs 1,17,775 crore in March, with the financial services sector being most affected by this selling. FPIs sold shares worth Rs 60.65 crore, which was more than 50 percent of the total selling.
From which sectors did FPI withdraw how much money in April?
Source: NSDL
Not India, this market is more suitable
Experts say that due to the energy crisis caused by the conflict in West Asia, its possible impact on the Indian economy and the continuous decline in the rupee, FPIs (Foreign Portfolio Investors) remain in a selling mood. From the perspective of FPIs, other markets like South Korea and Taiwan are considered more favorable, as these markets are expected to have much better earnings growth in FY 2027 compared to the modest growth expected in India. Due to the huge decline in the market after the start of the war, the valuations of shares have come down to reasonable levels. However, according to analysts, these are still not considered to be a great buying opportunity.
Why are FPIs selling financial stocks?
Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said that a major part of the total assets held in the custody of FPIs consists of financial stocks. So when they are in a selling mood, they sell stocks which are liquid and easy to sell. Apart from this, Vijayakumar told that last year was mainly the year of AI trade. AI stocks gave excellent returns. India, which is behind in the matter of AI, could not take advantage of it. The excellent performance of markets like South Korea and Taiwan was due to the tremendous growth in earnings of AI stocks in these markets. This year too, these markets are performing well, supported by expectations of strong earnings growth for AI stocks. Large scale selling of financial stocks by FPIs has made their valuations attractive. This is a good buying opportunity for long term investors.
What to expect from FPIs going forward?
Shrikant Chauhan, Head of Equity Research at Kotak Securities, said that global equity markets are mainly being influenced by news related to the ongoing conflict in West Asia and related negotiations, due to which there is a huge difference in returns at different places. He said that India has also entered the earnings season of Q4FY26, in which slight to moderate growth is expected. On the macro front, March CPI inflation (based on new series) stood at 3.4 per cent year-on-year, while merchandise exports declined 7.4 per cent year-on-year to $38.9 billion and imports declined 6.5 per cent year-on-year to $59.6 billion. Keeping all these things in mind, Chauhan expects FPI flows to remain volatile in the times to come.
