Foreign portfolio investors sold financial services stocks the most in March, with outflows of $6.5 billion from the sector, according to National Securities Depository Limited (NSDL). This marked the highest monthly selling in financial services since 2012, when depositories began publishing sector-wise data.
Financial services accounted for 51.6% of the total foreign investor outflows during the month. Overall, overseas investors sold nearly $12.6 billion worth of equities in March, according to NSDL data.
The selling came alongside a decline in benchmark indices. The Nifty and Sensex fell 11% in March, marking their steepest monthly drop since the Covid period. So far this year, benchmark indices have declined over 15%. The Nifty ended FY26 down more than 5%, while the Sensex lost 7%.
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Automobile and auto component stocks saw the next highest selling, with outflows of $1.3 billion. Construction recorded outflows of $975 million, followed by telecommunication at $602 million and fast-moving consumer goods at $579 million.
Meanwhile, Capital goods was the only sector to record net inflows during the month, with foreign investors investing $343 million. Miscellaneous stocks, which are not classified under any sector, also saw inflows of $267 million.
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Amid the correction, a Securities and Exchange Board of India official told last month that the market presents an opportunity for foreign investors. "There is a tremendous opportunity to invest in the Indian equity market with the kind of direction which has taken place now in the last few months, particularly after the war that has broken out," Kamlesh Chandra Varshney, whole-time member at Sebi, said at a Russia-India forum.
He said the Indian capital market is "quite attractive" for investors registered as foreign portfolio investors.
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