FII sell-off in auto, FMCG, oil & gas, power; shift to buying in banking, construction in June 2024

Foreign institutional investors (FIIs) embarked on a strategic shift in their investment approach during May, with a marked sell-off in sectors like automobiles, fast-moving consumer goods (FMCG), oil and gas, and power. Simultaneously, they turned buyers in the financial services, construction, and telecommunications sectors, signaling a realignment of their portfolios.

Intensified Selling in Key Sectors

The data reveals a significant surge in FII selling in certain sectors during the second half of May compared to the first half:

• Auto sector: FIIs sold ₹3,323 crore, up from ₹706 crore in the first half.
• FMCG: They offloaded ₹3,015 crore, a substantial increase from ₹1,158 crore earlier.
• Power: Selling intensified to ₹2,250 crore from ₹792 crore initially.

While selling dominated several sectors, FIIs turned net buyers in others, indicating a strategic shift in their investment approach:

• Financial Services: After initially selling over ₹9,600 crore, they bought ₹1,104 crore in the second half.
• Construction: From selling over ₹3,800 crore initially, they purchased ₹1,104 crore.
• Telecom: They bought ₹1,378 crore after selling ₹272 crore earlier.

Sustained Buying in Select Sectors

FIIs maintained their buying momentum in certain sectors, amplifying their investments in the second half of May:

• Consumer Services: They bought ₹2,026 crore, up from ₹733 crore in the first half.
• Capital Goods: Their purchasing initially increased to ₹5,648 crore from ₹376 crore.

Overall Trend

While the selling spree continued in several sectors, the data reveals a notable shift in FII investment patterns. They reduced their exposure in sectors like automobiles, FMCG, oil and gas, and power while redirecting their investments toward banking, construction, and telecommunications.

This strategic realignment of portfolios highlights the dynamic nature of foreign investment flows and the evolving landscape of investor preferences in the Indian markets.