IT, FMCG, auto, financials see most outflows from FIIs in first half of March

The auto sector saw a selloff of Rs 3,640 crore following Rs 3,960 crore in February.

After turning net buyers in the IT sector in February, Foreign Institutional Investors (FIIs) reversed course in March, offloading significant holdings amid heightened global volatility and uncertainty, driven in part by U.S. President Donald Trump’s tariff policies.

FIIs divested around Rs 6,934 crore from the IT sector in the first half of March after a net purchase of Rs 805 crore in February. With declining business and consumer confidence, concerns over the Indian IT sector’s growth outlook have intensified, given its heavy reliance on the US for revenue.

Morgan Stanley highlighted rising risks to the domestic IT industry due to global macroeconomic shifts and rapid technological advancements, warning that these factors could impact valuations and revenue growth. The brokerage cited increasing uncertainties in the global environment as a key downside risk for the IT sector and subsequently slashed its target prices for several major IT firms, with Infosys facing the most significant downgrade.

Beyond IT, FIIs continued to be net sellers across multiple sectors, including FMCG, auto, financial services, healthcare, capital goods, consumer services, and power. In the first half of March, FIIs sold around Rs 5,100 crore in FMCG stocks after offloading Rs 6,900 crore in February.

The auto sector saw a selloff of Rs 3,640 crore following Rs 3,960 crore in February. Financial and healthcare stocks witnessed selling of Rs 3,311 crore and Rs 2,049 crore, respectively, in the first half of March after FIIs had already sold Rs 6,991 crore and Rs 1,462 crore in February.

The capital goods and consumer goods sectors saw outflows of Rs 1,912 crore and Rs 1,900 crore, respectively, while the power and consumer durables sectors each recorded selloffs of Rs 1,867 crore.

Amid widespread selling, FIIs were net buyers in select sectors, including metals and mining, services, and media. They purchased around Rs 1,179 crore in metal stocks, followed by Rs 305 crore in services and Rs 143 crore in media stocks.

Despite the heavy selloff, FII assets under custody showed marginal improvement for the first time since November 2024, rising to Rs 62.86 lakh crore in the first half of March from Rs 62.39 lakh crore in February.

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