FIIs cut back on financials services, FMCG, IT shares in second half of April

Foreign investors aggressively sold financial services in the second half of April, with around Rs 12,550 crore offloaded by FIIs

Foreign investors aggressively sold financial services stocks in the second half of April, with around Rs 12,550 crore offloaded by FIIs, following a Rs 3,212 crore purchase earlier in the month.

This surge in selling was triggered by a decline in Kotak Mahindra Bank's shares, said analysts. In March, the financial sector witnessed buying worth Rs 3,465 crore.

Kotak Mahindra Bank faced pressure in the last week of April due to the RBI's ban on new customer onboarding through online and mobile banking, along with the suspension of new credit card issuance. Additionally, the resignation of joint managing director KVS Manian, after 29 years of service, impacted the bank further.

Late in April, FIIs sold Rs 4,915 crore in IT and Rs 3,563 crore in the FMCG sector, following earlier sales of Rs 4,658 crore and Rs 4,351 crore, respectively. Analysts attribute this to weak earnings in both sectors. FMCG witnessed subdued sales and flat profitability due to high expenses, while the IT sector's FY24 performance suggests caution for FY25.

In fact, FIIs exerted selling pressure on various sectors in late April. Rs 1,443 crore was sold in oil, gas, and consumable fuels, while healthcare and realty saw Rs 834 crore and Rs 768 crore sold, respectively. Additionally, FIIs sold Rs 662 crore in the realty sector.

In contrast, the telecommunications sector witnessed substantial buying activity, amounting to Rs 6,619 crore.

Capital goods and services also attracted buying, with around Rs 2,408 crore and Rs 1,764 crore invested, respectively.