Market sell-off: Financials, consumer services, IT stocks see heavy selling in January as FIIs exit

Consumer services and IT stocks followed closely, with sell-offs amounting to Rs 4,840 crore and Rs 4,544 crore, respectively.

Foreign investors continued their selling spree in financial, consumer services, fast-moving consumer goods, auto, and capital goods stocks during the second half of January.

Among the largest sell-offs, financial stocks witnessed significant selling worth over Rs 12,745 crore in the latter half of January, mirroring the outflows seen in the first two weeks of the month. Consumer services and IT stocks followed closely, with sell-offs amounting to Rs 4,840 crore and Rs 4,544 crore, respectively.

The auto and capital goods sectors saw foreign institutional investors (FIIs) offloading Rs 3,899 crore and Rs 3,077 crore, respectively. Other sectors, including healthcare, consumer durables, services, construction, and power, recorded sell-offs of approximately Rs 2,912 crore, Rs 2,869 crore, Rs 1,334 crore, Rs 1,277 crore, and Rs 1,083 crore, respectively.

Meanwhile, FIIs made selective purchases in telecom, textiles, chemicals, and diversified stocks, with investments worth Rs 643 crore, Rs 397 crore, Rs 313 crore, and Rs 287 crore, respectively.

Amidst this heavy selling, FII ownership in Indian equities plummeted to a fresh 12-year low of 16.08 percent in January, the lowest level since June 2012. The assets under custody (AUC) declined to an eight-month low of Rs 67.76 lakh crore in January. Since September 2024, FII AUC has eroded by over Rs 10.2 lakh crore, falling from Rs 78 lakh crore.

Conversely, mutual fund ownership in Indian equities surged to a record high of 10.28 percent in January, up from 9.93 percent in December. The value of shares held by mutual funds stood at Rs 43.33 lakh crore during the month.

While the total value of assets owned by domestic institutional investors (DIIs) for January remains unavailable, stock exchange data from the December quarter estimated their total holdings at Rs 73.47 lakh crore, down from Rs 76.78 lakh crore in the September quarter.

FII and mutual fund ownership is calculated by dividing January’s AUC data, as reported by NSDL, by the total market capitalisation of all NSE-listed firms, based on the daily average for January. In the December 2024 quarter, FII ownership stood at approximately 17.23 percent, while DII ownership in Indian equities was just below 30 basis points at 16.9 percent.

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