Foreign portfolio investors (FPIs) have turned aggressive sellers in India’s financial services sector, offloading stocks worth ₹31,831 crore during the first half of March. This sharp reversal marks a significant shift from February, when FPIs had posted net buying of ₹8,418 crore in the same sector.
The sudden pivot underscores growing volatility in FPI flows, with overall outflows exceeding ₹52,700 crore for the period. Financial stocks, typically considered a barometer of FPI sentiment due to their weightage in major indices, have borne the brunt of the selling pressure.
The shift reflects broader concerns influencing foreign investor sentiment, including global interest rate trajectories, domestic inflation data, and valuations in Indian equities. The financial services sector—comprising banks, insurance, and non-banking finance companies—remains a key component of FPI portfolios due to its size and liquidity on NSE and BSE.
Analysts attribute the heavy selling to a combination of profit-taking after recent gains and cautious positioning ahead of anticipated policy announcements. The sharp swing from net buying to aggressive selling within a month suggests FPIs are reassessing their India exposure amid uncertain macroeconomic conditions.
Market participants will closely monitor FPI flows in the coming weeks, as sustained outflows could impact market liquidity and valuations across sectors dependent on foreign capital inflows.
Source: Read original