FIIs Log Worst IT Outflow In Nearly A Year, Telecom Bucks The Trend

In a stark reversal of trends, foreign institutional investors have pulled the plug on Indian IT stocks with staggering intensity. Between April 1-15, FIIs offloaded $1,614 million worth of IT equities—the worst sectoral outflow since June 2024, when $2,559 million was dumped. The exodus occurred over just nine trading sessions, highlighting the sharp pivot in foreign sentiment.

The selloff comes amid a sustained downturn in tech stocks, with the NSE Nifty IT index plunging nearly 10% during this fortnight alone. Year-to-date, the index has slumped 21.53%, reflecting mounting investor concerns over global tech demand, earnings growth moderation, and valuation pressures.

A Tale Of Sectoral Divergence

But while the tech sector found itself squarely in the firing line, other sectors unexpectedly attracted FII interest.

Telecom emerged as the biggest winner in this reallocation story. FIIs poured in $249 million during the first half of April, following a robust $399 million inflow in the latter half of March.

FMCG stocks also staged a quiet comeback. After suffering a $57 million outflow in the previous fortnight, the sector bounced back with a $69 million inflow.

Even media stocks and diversified baskets caught some foreign capital, with modest inflows of $12 million this fortnight versus $35 million in the previous one.

Financials And Cyclicals Bear The Brunt

On the flip side, financials saw a dramatic U-turn. After receiving a massive $2,055 million infusion in late March, the sector witnessed a sharp outflow of $525 million in the first half of April.

Cyclical sectors fared no better. Capital goods (-$352 million), metals and mining (-$330 million), oil and gas (-$322 million), and auto (-$299 million) all suffered large outflows, signalling a risk-averse stance from foreign players.

Even structural bets weren't spared. Healthcare (-$161 million) and construction (-$287 million) joined the red-zone list. Meanwhile, real estate (-$42 million) and chemicals (-$36 million), which previously basked in green inflows, were hit with profit-taking or capital reallocation. Consumer durables, textiles, and utilities also saw FIIs trimming positions.

In total, according to NSDL data, FIIs have withdrawn $2,689 million from Indian equities from April 1-17—a clear sign of broad-based caution. But this isn't a blanket exit.