FPI increase wager on banking stocks in September quarter, shows data

During the quarter ended September 30, FPIs pumped in Rs 7,500 crore (over $1 billion) into banking stocks

Overseas investors seem to have taken a liking to domestic lenders. During the quarter ended September 30, they pumped in Rs 7,500 crore (over $1 billion) into banking stocks. Since April, they have invested about Rs 12,500 crore into banking stocks, second only to energy stocks —which saw an investment of Rs 13,400 crore. Analysts say the bulk of FPI flows into the energy sector in FY21 has gone into Reliance Industries, the country’s most-valuable firm. FMCG stocks have grabbed the third — the highest share of FPI flows this financial year at Rs 11,500 crore. But, during the September quarter, they saw net foreign outflows of Rs 4,100 crore —  the second-most after the telecom sector.

In the banking space, most flows have gone into top lenders, such as HDFC Bank, ICICI Bank, Kotak Mahindra Bank, and Axis Bank, analysts say. Banking stocks saw the maximum selling pressure from FPIs during the meltdown in March, triggered by the Covid-19 pandemic. For the three months ended March, the banking sector saw FPI selling of Rs 16,200 crore, the data shows. On a year-to-date basis, the Bank Nifty index is still down 27 per cent, while the Nifty50 index is down just  3.3 per cent.