Nifty 50 Hits 20,000: This Sector Saw $14.7-Billion Outflows As Index Doubled

More than half of the net FPI flows since Nifty hit 10,000 in June 2020 have come since April 1 this year.

US dollar banknotes. Photographer: Dimas Ardian/Bloomberg
US dollar banknotes. Photographer: Dimas Ardian/Bloomberg

India's benchmark index Nifty 50 doubled to 20,000 within 38 months since the NSE benchmark was last at 10,000 in June 2020.

One of the biggest characteristics of this rally are the domestic and foreign flows. According to data available on NSDL, foreign portfolio investors net bought $31.50 billion worth of stocks between June 30, 2020 and August 31, 2023. To put it in perspective, more than half of this—about nearly $18.24 billion—has come from April 1, 2023 to Aug. 31 in the current financial year.

IT Sector Outflows

But one sector that saw the foreign money outflow since June 30 is information technology. FPIs sold IT stocks worth $14.7 billion, a large part of this happening since April 2022. Nearly $8.2 billon of outflows took place since December 2021, according to data collated from NSDL, when FPIs turned negative on the sector.

In the current financial year, FPIs have net sold $458 million worth of equities but have been buyers of $693 million worth of stocks since July 16.

Capital goods witnessed $1.4 billion in investments since July 16.

Financial services including banks, NBFCs and insurance witnessed net FPI inflows of $5.14 billion or 16.3% of the total inflows since June 30, 2020.

This was followed by FMCG, and auto and auto components, data showed.

Nearly 62% of the FPI net inflows came since April this year. Net investments flowed largely into financial services, auto, capital goods, consumer services, FMCG and healthcare. These six sectors account for nearly 80% of the net FPI investments. IT sector saw outflows of $458 million.

At the end of Aug. 31, FPIs held $644.4 billion in assets under custody. Financial services accounted for 32.9%, while oil & gas and IT accounted for 8.9% and 9.7%, respectively. This was followed by FMCG and auto.

The others sector that saw FPI net inflows of $7.9 billion of the total assets under custody. This sector witnessed net investments of $3.9 billion in August 2020, according to NSDL data.