FPIs continue to bail out of financial services

Mumbai: Foreign investors accelerated their selling in financial services in the second half of January, offloading ₹5,402 crore after having sold ₹3,190 crore in the first half. For 2025, outflows from the sector stood at ₹14,903 crore. "There are no serious valuation concerns in the financial services sector however, private banks did see some profit-booking as PSU banks outperformed on a relative basis," said Pankaj Pandey, head of Retail Research at ICICI Direct. Overall, overseas investors sold ₹29,056 crore across 15 sectors in the second half of January, shows NSDL data. In the first half, they had withdrawn ₹22,420 crore from 19 sectors. The healthcare sector saw outflows of ₹5,113 crore in the second half of the month. Foreign investors pulled out nearly ₹25,000 crore from the sector in 2025. Most pharma and healthcare companies with significant US exposure reported muted earnings this quarter, which could have influenced the selling, said Pandey. Global investors also offloaded more than ₹3,000 crore each from telecom, consumer services and auto stocks. "The pricing power has been somewhat affected for telecom companies given that the government is reviving the third player in the sector which could have led foreign investors to lighten their holding in this space," said U R Bhat, Co-founder & Director, Alphaniti. Pandey said automobile stocks' rally in 2025 could have prompted foreign investors to trim positions.128230990 Inflows Metals and mining led inflows in the second half of January, attracting ₹8,837 crore, supported by momentum in precious metals. Capital goods drew ₹2,435 crore. "Global investor preference has been skewed towards metals and mining amid the rally in precious metals, though this may gradually shift from non-ferrous to ferrous metals," Pandey said. The metals sector had received ₹2,984 crore in December. So far in 2026, gold rose 17% on Wednesday, while silver gained 18%."The volatility in the derivatives market for precious metals could have driven investor interest towards stocks of metal companies, which allows them to play on the theme with limited risk," said Bhat.

from Economic Times https://ift.tt/o7aTmG1

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