Financials, IT, energy see highest FPI selloff in last fortnight of Sept

Financials, information technology (IT), and energy stocks accounted for 80 per cent of the Rs 20,000-crore plus selloff by foreign portfolio investors (FPIs) during the last fortnight of September.

Overseas funds dumped Rs 7,008 crore worth of shares of companies in the financial services sector, while IT stocks worth Rs 5,201 crore were sold, according to data collated by primeinfobase.com.

The selling dragged the BSE Financial Services index by 4.7 per cent in the last two weeks of September.

FPIs have the highest sectoral allocation to financial stocks, at 31.64 per cent. Analysts said that the rise in inflation and yields is negative for finance companies as they have to keep higher provisions for their 

mark-to-market bonds which could eat into their profits.

The allocation towards oil, gas & consumables declined to 11.15 per cent, from 11.95 per cent, at the end of August while the allocation to IT stocks fell to 10.32 per cent, from 10.67 per cent, during the same period. The selloff in IT stocks comes amid downgrades by several brokerages citing global uncertainty and margin pressures.

During the second half of September, FPIs bought telecom shares worth Rs 1,634 crore, followed by consumer services stocks worth Rs 978 crore and fast-moving consumer goods or FMCGs worth Rs 768 crore. Analysts said FPIs prefer telecom stocks as they are unaffected by global headwinds. Moreover, the sector is consolidated in the hands of a few players which gives them more leeway in terms of passing price pressures.

FMCG stocks are considered defensive bets whenever there is global financial turmoil. Even during the Lehman crisis, the fall in FMCG stocks was minimal, compared to others, analysts said. The BSE FMCG index rose 2.5 per cent in the second fortnight of September.