FPIs sell off big in financial services sector in August

Foreign investors dumped shares in financial services companies worth ₹14,790 crore during the first-half of August. This is the highest selling by FPIs across sectors in this period. These investors sold shares worth ₹28,642 crore across 15 sectors between August 1 and 15, according to data from National Securities Depository Ltd (NSDL).

Analysts said that the BFSI sector is where FPIs have the highest exposure and hence if they have decided to lighten their India exposure, BFSI would take the first hit.

“Some banks had merger related issues and benchmark weight changes that could have been the reason for reducing exposure,” said UR Bhat, co-founder, Alphaniti. “Most other banks have brought down stressed asset exposure to one of the lowest levels while being adequately capitalised; however, being a cyclical sector, these good times may not last.”

Bhat said RBI’s caution on unsecured lending and promises of loan waivers by some political parties would have influenced sell decisions.

Bank Nifty slipped 3.05% in the last one month, while the Nifty moved up 1.06% in the same period.

From January to July, foreign investors pulled ₹52,924 crore out of financial services shares

They also offloaded shares in metals & mining, services and construction materials worth over ₹2,000 crore. Metals & mining and construction materials had witnessed foreign buying worth ₹7,310 crore and ₹680 crore, respectively, in July while services had seen selling worth ₹1,474 crore.

Automobiles, oil & gas and capital goods sectors saw foreign outflows worth ₹1,628 crore, ₹1,311 crore and ₹1,089 crore, after receiving inflows in July. Automobiles and capital goods have received inflows worth ₹10,064 crore and ₹25,770 crore this year till July; however, oil & gas sector witnessed outflows worth ₹11,291 crore in the same period.

Overseas investors bought Indian equities worth ₹9,819 crore across eight sectors in the first half of the month.