FPI pullout: IT bore brunt of FPI pullout in April amid tariff turmoil

Mumbai: The information technology (IT) sector saw the highest selling from overseas investors between April 1 and 15 as concerns over the impact of an expected US downturn heightened risk-off sentiment. Foreigners sold IT shares worth ₹13,828 crore in this period, after pulling ₹8,451 crore out of sector in March. In 2024, foreign investors pumped over ₹14,000 crore into the sector.

“A significant chunk of orders in the IT sector are driven by the US, and since the outlook on those orders is uncertain given the concerns of a slowdown in the US, the sector has seen highest outflows in the first half of April,” said Divam Sharma, fund manager, Green Portfolio PMS.

Overseas investors offloaded shares in the financial services and capital goods sectors worth ₹4,501 crore and ₹3,019 crore, respectively. While capital goods had seen outflows last month, financial services had received foreign inflows worth over ₹14,000 crore.

“Most sectors are anticipated to be impacted by the confusion on Trump tariffs but sectors with premium valuations are more prone to higher foreign outflows,” said UR Bhat, director, Alphaniti.

In the first half of April, foreigners sold Indian equities worth ₹37,108 crore across 17 sectors after infusing ₹31,877 crore in the second half of March, according to NSDL. Sharma said foreign sell-off in financial services has tempered after the recent outflows because of comfortable valuations.

“Bank Nifty has performed well owing to the short squeeze in banking stocks, and since it is a domestic-facing sector, tariffs are not likely to have a major impact on the sector,” he said.Metals and mining, oil and gas, automobiles and construction sectors also saw foreign outflows over ₹2,000 crore each. They bought shares worth ₹3,181 crore across 6 ix sectors in first half of April, with elecommunications receiving the highest inflows of ₹2,137 crore. Foreign investors have pumped over ₹17,600 crore into stocks in previous 5 trading sessions, but they remain net sellers in April of ₹16,670 crore.