Foreign portfolio investors resumed selling Indian shares in September’s first half, withdrawing nearly ₹14,116 crore amid sectoral shifts towards healthcare and defensive stocks, as concerns over inflation, crude prices, and geopolitical tensions influence global investment flows.
Foreign portfolio investors turned sellers again in the first half of September, with overseas funds trimming Indian equity exposure after roughly five fortnights of buying, according to the Economic Times. The selling was concentrated in financials, automobiles, oil and gas, and fast-moving consumer goods, while healthcare drew the strongest inflows as investors leaned towards defensive bets in an uncertain market.
The Economic Times said foreign investors sold nearly ₹14,116 crore of Indian shares between September 1 and 15, reversing purchases of ₹13,000 crore in the second half of August and ₹16,621 crore in the first half of that month. Kranthi Bathini, director of equity strategy at WealthMills Securities, told the newspaper that foreign activity had been subdued and that long-only investors were staying cautious because of higher crude prices, inflation worries and geopolitical tensions.
Financial stocks took the heaviest hit, with foreign investors selling ₹6,204 crore during the period after having bought ₹3,959 crore in the latter part of August. Autos also saw sharp outflows of ₹2,670 crore, deepening the selling from the previous fortnight. Vishad Turakhia, chief executive of Equirus Securities, told the Economic Times that concerns about lending margins in banks and cost pressures in the auto sector were encouraging profit-taking, even though demand remained broadly firm.
The shift was not uniform across the market. Healthcare attracted ₹2,114 crore of foreign buying, while construction and services also saw inflows, the Economic Times reported. Outlook Money said foreign investors had sold ₹20,974 crore of Indian equities through September 18, reinforcing the view that overseas funds were rotating away from cyclical sectors and towards defensive names. The broader pattern suggests that domestic-focused sectors are still finding support, even as foreign investors trim risk in large-cap financials and other sensitive industries.
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