FPIs train guns on financial services stocks in Sept, shows data

More than one-third of the foreign portfolio investor (FPI) flows into the equity markets in the first two weeks of September went to the financial services stocks. They attracted flows worth Rs 5,335 crore, while fast-moving consumer goods (FMCG) stocks got Rs 1,997 crore, data collated by primeinfobase.com revealed.

During the first half of the ongoing month, FPIs bought shares worth Rs 12,763 crore.  As of September 15, 2022, FPI allocation towards the financial services sector rose to 31.94 per cent, from 31.69 per cent, at the end of August 2022.

In August, FPIs had invested Rs 12,799 crore in financial stocks while in July they bought shares worth Rs 1,014 crore.  However, the inflows came after large outflows worth Rs 85,43,300 crore in the first six months of 2022.

Analysts believe that an improving banking credit growth and a peaking bad loan cycle as the reasons for FPI interest in finance stocks. They also said that FMCG stocks are considered the most defensive bets whenever there is global financial turmoil.  Even during the Lehman crisis, the fall in FMCG stocks was minimal, compared to others.

On the other side, IT stocks saw maximum selling by FPIs in the last fortnight, at about Rs 3,998 crore, weighing on its performance. Several brokerages have downgraded IT stocks amid global uncertainty and margin pressures. After IT, the real estate stocks saw maximum outflow, however, the quantum of selling was relatively lower at Rs 574 crore.