FPIs continue selling spree in first half of June; financials, oil & gas hit hardest

Synopsis

Foreign investors offloaded shares worth a staggering ₹64,761 crore in the first half of June, the highest since March, driven by elevated oil prices. Financial services saw the largest outflows, followed by oil, gas, and consumable fuels. Automobile and IT sectors also experienced significant selling pressure, with concerns over oil prices and AI's impact on tech revenues cited as key reasons.

Mumbai: Foreign investors sold shares worth ₹64,761 crore across 19 sectors in the first half of June, marking the highest fortnightly outflow since the second half of March, according to NSDL data. The selling was significantly higher than the ₹14,621 crore offloaded across 13 sectors in the second half of May, as elevated oil prices weighed on sentiment.

Financial services continued to bear the brunt of the outflows, with foreign investors selling shares worth ₹11,263 crore in the first half of June, reflecting the sector's large weight in benchmark indices. The segment has seen cumulative outflows of over ₹91,000 crore between January and April.

"When foreign investors choose to deploy capital, financial services will see the highest inflow as they have lightened their positions significantly in the sector, and the sector is attractive after the correction," said U R Bhat, cofounder and director at Alphaniti.

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dump over ₹64,000 cr in june first half

Oil, gas and consumable fuels saw the second-largest outflows at ₹10,488 crore during the period, after nearly ₹9,000 crore of selling in May.

"While financial services saw the highest selling, it was not large relative to total foreign holdings. The outflows from the oil and gas sector were substantial," said Siddarth Bhamre, head of institutional research at Asit C Mehta.

Among other sectors, overseas investors sold shares worth ₹9,044 crore in automobiles and auto components and ₹6,733 crore in information technology. From January to April, the two sectors had seen outflows of ₹17,985 crore and ₹24,870 crore, respectively.

Automobile stocks saw selling pressure because their prospects are closely linked to the direction of oil prices, Bhamre said. IT stocks remained under pressure as concerns resurfaced over artificial intelligence disrupting the revenue models of Indian technology companies.

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