Cracking the investment strategy: FPIs are bullish on finance, auto stocks

Foreign portfolio investors (FPI) bought stocks of financials, automotive (auto), fast-moving consumer goods (FMCG), and capital goods during the second half of May.

Financial services saw maximum buying at Rs 9,289 crore, followed by auto stocks at Rs 3,997 crore and consumer services at Rs 1,931 crore, according to data collated by Primeinfobase.FPIs bought FMCG stocks worth Rs 1,571 crore and capital goods worth Rs 1,352 crore. In the second fortnight of May, FPIs bought shares worth Rs 19,099 crore.

Analysts say FPIs are bullish on finance and auto stocks as their revenues are primarily dependent on domestic demand, which is in a better place due to the relative outperformance of the Indian economy. Meanwhile, metals and mining stocks saw selling worth Rs 942 crore, followed by information technology (IT) stocks (Rs 746 crore), power (Rs 479 crore), media (Rs 384 crore), and services (Rs 366 crore).

IT had the second-most significant sector allocation of FPI investments at 10 per cent. “Metal prices are down. It is difficult for metals to do well in the short term due to recessionary fears,” observes Chokkalingam G, founder, Equinomics Research & Advisory. As of end-May, the highest sectoral allocation of FPI investments was to financial services at 33.74 per cent.