FMCG, Financials See Most Outflows In February So Far As FII Holdings Hit 11-Month Low
The benchmark NSE Nifty 50 and the BSE Sensex have fallen 13.3% and 11.7%, respectively, from their peak.
Shares of financial and consumer goods companies continued to witness outflows in February, as global fund holdings in Indian stocks fell to a nearly one-year low.
Financial services stocks saw an outflow of $615 million from foreign institutional investors, while the fast-moving consumer goods companies saw nearly $500 million worth selloff, according to data from National Securities Depository Ltd.
Capital goods, construction materials and consumer services are the other sectors that saw heavy outflows in the first half of February. In January, these funds offloaded $2.88 billion in financial stocks followed by a $747 million selloff in information technology.
So far in the year, FPIs have sold equities worth Rs 1,130 crore. In January, the FPIs sold equities worth Rs 900 crore, according to the National Securities Depository Ltd.'s data.
The selling seen in key sectors comes amid global uncertainties, including geopolitical and trade tensions and the expectation of a stronger dollar and higher bond yields, with the onset of Donald Trump's presidency in the United States.
Assets under custody of foreign institutional investors fell to an 11-month low of Rs 66.77 lakh crore, the lowest since March 2024.
The sell-off in these sectors is commensurate with the decline in the stock value. Nifty Bank fell 1.3%, while Nifty FMCG has slipped over 8% so far this month, compared to a 2.8% decline in the benchmark Nifty 50.
Nifty FMCG is poised to end lower for the 15th consecutive session on Thursday, falling into the 'bearish' zone after tumbling 21% from the peak last year.
Nifty Bank is trading at 12 times price to earnings, compared to the average 10-year forward valuation of 15.4 times, the cheapest among the major indices. Nifty FMCG is trading at 39 times their price to earnings.
The benchmark NSE Nifty 50 and the BSE Sensex have fallen 13.3% and 11.7%, respectively, from the previous peak, triggering the worst fall since 2020.
