FPI Exodus in October: Financial Services, Oil & Gas, Auto sectors hit the hardest so far

Foreign Portfolio Investors (FPIs) have been persistently offloading Indian equities throughout October, shifting focus towards more affordable markets, such as China. As of October 17, FPI outflows from the Indian stock market have reached a substantial ₹70,398 crore (approximately $8.38 billion), following robust inflows of ₹57,724 crore in the preceding month.

This significant selling pressure has driven the Nifty 50 down by more than 1,700 points from its record high, which was achieved at the end of September.

The shift in FPI sentiment stems from a combination of factors, including China's recent monetary and fiscal stimulus aimed at reviving its slowing economy. Additionally, the relatively high valuations of Indian equities, alongside rising geopolitical tensions in the Middle East, have further accelerated FPI outflows.

During the first half of October, FPIs have divested ₹66,301 crore in Indian stocks, with the Financial Services, Oil & Gas, and Automobile sectors experiencing the most pronounced impact.

Here are top sectors that FPIs bought and sold the most in the first half of October 2024:

What are FPI selling the most?

The Financial Services sector experienced the highest FPI outflows from October 1 to 15, amounting to ₹23,283 crore. This marks a stark reversal from September, when FPIs invested ₹27,200 crore in the financial services sector, following outflows of ₹12,008 crore in August and ₹7,648 crore in July, according to data from the National Securities Depository Ltd. (NSDL).

The Oil, Gas & Consumable Fuels sector also witnessed significant outflows, with FPIs withdrawing ₹12,371 crore in the first half of October. The Automobile and Auto Components sector followed with ₹8,131 crore worth of FPI selling. The auto sector has been facing sustained bearish sentiment, having recorded outflows of ₹2,106 crore in September and ₹2,379 crore in August, NSDL data showed.

Other sectors hit by heavy FPI outflows in the first fortnight of October include Fast-Moving Consumer Goods (FMCG) with ₹6,818 crore in outflows, and the Consumer Services sector with ₹4,633 crore. Additionally, the Information Technology (IT) sector recorded outflows of ₹2,727 crore, followed by the Power sector at ₹2,678 crore, and Healthcare at ₹2,376 crore.

FPIs also pulled out ₹1,723 crore from the Construction sector, ₹1,603 crore from Telecommunications, and ₹1,426 crore from Construction Materials during this period.

What are FPIs buying?

During the first half of October, no significant FPI inflows were observed across most sectors. However, the Chemicals sector saw the highest inflows, with overseas investors purchasing ₹552 crore worth of shares between October 1-15, per NSDL data.

The Metals & Mining sector attracted modest FPI inflows of ₹222 crore, while the Utilities sector received inflows amounting to ₹127 crore during the same period. Despite these pockets of buying, overall FPI activity remained largely tilted towards selling.

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