FPIs take aim at financial services stocks in September, data shows

More than a third of foreign portfolio investor (FPI) inflows into equity markets in the first two weeks of September went into financial services stocks. They attracted flows worth Rs 5,335 crore, while consumer fast-moving goods (FMCG) stocks gained Rs 1,997 crore, data compiled by primeinfobase.com showed.

In the first half of the current month, FPIs bought shares worth Rs 12,763 crore. As of September 15, 2022, the FPI allocation to the financial services sector increased to 31.94 percent from 31.69 percent at the end of August 2022.

In August FPIs had invested Rs 12,799 crore in financial stocks while in July they bought shares worth Rs 1,014 crore. However, the inflows came after large outflows worth Rs 85,43,300 in the first six months of 2022.

Analysts believe improving bank lending growth and a peak in the bad debt cycle are the reasons behind FPI’s interest in financial stocks. They also said FMCG stocks are considered the most defensive bets when global financial turmoil hits. Even during the Lehman crisis, the decline in FMCG stocks was minimal relative to others.

On the other hand, IT stocks have seen maximum selling by FPIs at around Rs 3,998 crore over the past two weeks, which weighed on their performance. Several brokerage houses have downgraded IT stocks amid global uncertainty and pressure on margins. After IT, real estate stocks saw maximum outflow but the sales volume was relatively smaller at Rs 5.74 crore.

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