After a month and a half of being net sellers during October and half of November, finally, FIIs are finally turning back to India. FII investments have turned positive for the second half of November, which increased FII’s share in the market to 16.09%, from below 16% in October.
Rise of FII Investment
In the second half of November 2024, the foreign institutional investors’ investment increased sharply and they became net buyers with the purchase of equities worth ₹ 1311 crore. Contrastingly in the first half of the month, foreign institutional investors sold equities worth ₹ 23913 crore. However, the selling pressure eased in November compared to October when FIIs offloaded shares worth ₹ 87590 crore. Amidst this volatility in the market, the asset under custody (AUC) of FIIs increased to ₹ 71.88 lakh crore in the previous month, from October’s ₹ 71.08 lakh crore.
FII Investments across Sectors
In the 2nd half of November, FIIs invested the most in financial services which is around ₹ 9597 crore. This is in contrast to the heavy selling of the market witnessed by FIIs in this sector in October and the first half of November. The FIIs offloaded equities of financial services worth ₹ 26139 crores and ₹ 7092 crore respectively during the periods.
Apart from financial services, significant buying by FIIs has been witnessed in the IT and FMCG sectors as well. During November’s second half, FIIs were buying stocks of IT companies worth ₹ 2429 crore however, they bought more IT stocks in the first half of November that is of ₹ 3087 crore. In October, FIIs also dumped IT stocks worth ₹ 2899 crore.
Coming to the FMCG sector, FIIs purchased equities worth ₹ 2184 crore in 2nd half of November, which is down from the first half’s purchase worth ₹ 3589 crore and way down from October’s ₹ 11582 crore.
So, while the overall FII investment turned positive in these sectors only investments in financial services increased in the 2nd half of November, while for the other two sectors, it reduced.
FIIs also turned buyers in sectors like realty where it purchased equities worth ₹ 1367 crore in November’s second half. Then there are capital goods stocks which FIIs purchased around ₹ 681 crore, consumer services of ₹ 471 crore, followed by stocks of consumer durables worth ₹ 426 crore.
Sector-Wise FII Investments
| FII Inflow | ||||
| Sectors | 16-30 Nov | 1-15 Nov | 1-15 Oct | 16-31 Oct |
| Financial Services | 9597 | -7092 | -23274 | -2865 |
| Information Technology | 2429 | 3087 | -2727 | -172 |
| Fast Moving Consumer Goods | 2184 | -3589 | -6818 | -4764 |
| Realty | 1367 | 694 | -953 | -437 |
| Capital Goods | 681 | -1004 | -853 | -1933 |
| Consumer Services | 471 | -629 | -4633 | -4230 |
| Consumer Durables | 426 | -433 | -846 | -2017 |
| Textiles | 320 | 92 | -68 | 31 |
| Power | 109 | -906 | -2678 | 1168 |
| Construction | 89 | 1917 | -1723 | -2927 |
| FII Outflow | ||||
| Oil, Gas & Consumable Fuels | -6132 | -7214 | -12371 | -9073 |
| Automobile and Auto Components | -3053 | -4411 | -8131 | -2309 |
| Telecommunication | -2942 | -2136 | -1603 | -1095 |
| Services | -2472 | -1250 | -937 | 34 |
| Construction Materials | -1913 | -802 | -1426 | -2014 |
| Healthcare | -254 | 734 | -2376 | 2321 |
Sluggish Sectors as per FII Investments
As per current FII investment trends, the selling stance is continuing in the Oil & gas sector. During November’s second half, the FIIs sold oil and gas stocks worth ₹ 6132 crore. They sold equities in this sector worth ₹ 21444 crore in October and ₹ 7214 in the first half of November. Though the selling pressure is dropping, it is still facing sluggish market activities.
Despite the shift in FII investment in India, sector-wise, selling pressure is continuing in the automobiles and telecom sectors. FIIs sold equities worth ₹ 3053 crore to the automobile sector, and the telecom sector followed with ₹ 2942 crore of offloading by FIIs during the period. The telecom sector also witnessed selling worth ₹ 2942 crore during the period. The selling has increased marginally for the telecom sector as telecom equities sold in October stood at ₹ 2698 crore, and in the first half of November at ₹ 2136 crore.
Another significant sector, which has been sluggish due to FII selling pressure, is construction materials. FIIs sold equities of this sector worth ₹ 1913 crore in the second half of November, following the selling of ₹ 3440 crore in October and ₹ 802 crore in the first half of November.
Wrapping up
The win of Trump in the US has played a pivotal role in the return of FIIs in India as the tie between India and the US is strong and growing. However, it will be interesting to see FII activity in the last month of this calendar year when most global markets go into hibernation mode due to all upcoming holidays.
Source: MoneyControl
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