In July, foreign portfolio investors bought a net amount of Rs 32,365 crore, however, due to concerns about high valuations and the topline growth forecast, among other reasons, foreign investors sold in some sectors, such as IT, power, metals, and energy.
According to NSDL data, in July, foreign institutional investors (FIIs) sold shares valued at around Rs 3,000 crore in the mining and metals industry, followed by shares valued at Rs 2,635 crore in the oil and gas industry and shares valued at Rs 2,498 crore in the power sector. FPIs sold shares in the IT sector for a total of Rs 981 crore.
With outflows of almost Rs 2,723 crore for the month, the construction industry was another one where FPIs were net sellers. FPI interest in financials remained strong in the interim, with inflows totaling Rs 9,170 crore.
In addition to the financial sector, the telecommunications industry also experienced notable inflows, with inflows of around Rs 7,944 crore. This was followed by consumer services, which saw inflows of Rs 4,704 crore, healthcare, which saw inflows of Rs 3,299 crore, and capital goods, which saw inflows of Rs 2,792 crore.
Fascinatingly, because the fund sector has been gaining from robust retail inflows in the form of SIP money, FPIs and mutual funds have been holding a contrarian position on the Indian stock market for some time. As a result, there is currently a situation where the whole amount of MFs owned in the stock market is almost equal to the total amount of FPIs owned, with the margin closing to a record low.
However, during the same quarter, foreign portfolio investors withdrew Rs 7,693 crore from the market, resulting in a 12-year low of 17.38 percent in their cumulative shareholding as of June 30, 2024—a 34 basis point decrease from 17.72 percent as of March 31, 2024.
FPIs net sold shares worth little more than Rs 10,000 crore on August 5, continuing the selling frenzy. This was the largest single-day selling since the Lok Sabha election results were made public on June 4. According to data from NSDL, FPIs have been net sellers for Rs 11,111 crore this month.
