Foreign investors pulled out of Indian equities for the eight straight month, extending the longest selling streak in at least 10 years.
Overseas investors sold stocks worth $5.16 billion (Rs 39,995 crore) in May alone and $27 billion (nearly Rs 2.06 lakh crore) over the last eight months, according to the National Securities Depository Ltd.'s data.
That comes amid efforts by central banks globally to tackle inflation, including the Reserve Bank of India's surprise rate hike in May. The surge in crude prices and supply-chain issues on account of the ongoing geopolitical unrest weighed on the sentiment.
This is the longest streak of monthly withdrawal since fortnightly data became available in 2012.
The FPI withdrawal coincides with the selloff in stock benchmarks since hitting a record in October 2021.
In May, the Sensex lost more than 2.6% amid concerns over inflation and economic impact of tightening policy. So far in 2022, barring March, the benchmarks have logged monthly losses.
What FPIs Bought And Sold In May
Foreign investors withdrew the most from the information technology sector in May, followed by financial services, and oil and gas. Only five sectors witnessed net inflows, led by services and power.
FPIs have remained net sellers of IT stocks for the ninth month in a row. They sold tech stocks worth more than $2 billion (Rs 16,134 crore) in May—the largest sell-off since January 2022 in dollar terms.
The overseas investors have withdrawn nearly $9.5 billion (Rs 71,495 crore) from IT stocks over the nine months. The Nifty IT was one of the sectoral laggards, losing more than 6% in May.
All constituents of the Nifty IT declined, with the worst drop seen in L&T Technology Ltd., followed by Mindtree Ltd. and L&T Infotech Ltd.
In May, the board of L&T Infotech approved a proposal to merge Mindtree with itself in a share-swap deal. Analysts, however, said it was too early to gauge the cost synergies from the deal.
Financial services have seen outflows for the eighth month in a row. Foreign investors have withdrawn more than $13 billion (Rs 95,499 crore) during the period.
The Nifty Bank fell 1.66% in May, dragged by more than 10% losses in Bank of Baroda and Punjab National Bank.
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