Oil And Gas Stocks See Highest FPI Outflows In November; IT Sector Bucks The Trend

Foreign portfolio investors withdrew $1.6 billion from the oil and gas sector in November, marking the highest monthly outflows among all sectors, according to the latest data from National Securities Depository Ltd. Overall, FPIs sold $2.6 billion worth of Indian equities in November.

This was the third consecutive month of outflows for the sector. In October, FPIs had withdrawn $2.6 billion, the largest monthly outflow from the oil and gas sector since March 2012, when the Securities and Exchange Board of India and the NSDL began tracking sector-wise FPI inflows and outflows.

Foreign investors are waiting for specific triggers and key geopolitical updates, before increasing their investments, according to Tradejini’s Chief Operating Officer Trivesh D. “Post-Q2 earnings could further boost FII interest, paving the way for continued market growth and stability. However, FIIs are still adopting a wait-and-watch approach, carefully observing market conditions before committing further,” Trivesh said in an emailed statement.

The significant outflows coincided with Indian equities entering a correction phase in November and Indian equity benchmarks, Sensex and Nifty, fell more than 10% from their peaks they clocked in September. During November, the BSE Oil and Gas Index dropped by 2.4%, with shares of Indraprastha Gas leading the decline with a 22% fall.

Apart from oil and gas, the automobile and auto components sector also faced significant outflows in November. FPIs sold $884 million worth of shares in this sector, making it the second-worst affected by FPI withdrawals during the month. 

In contrast, the information technology sector attracted the highest inflows from FPIs. Overseas investors pumped $653 million into IT stocks in November. This was followed by inflows into the financial services sector, which saw $293 million in investments. The realty sector received $244 million, while the construction sector attracted $238 million.