Market Performance: FPIs Net Positive in February
February was a mixed month for foreign portfolio investors (FPIs) in India. Despite heavy selling in the IT sector, overall FPI flows remained positive.
- FPIs were net buyers of Indian equities worth ₹22,615 crore in February.
- The selling pressure was concentrated in the IT sector, while several other sectors saw strong foreign inflows.
This trend highlights selective sectoral interest among foreign investors, reflecting both caution and opportunity in different parts of the market.
Main News: IT Stocks Bear the Brunt
The Indian Information Technology (IT) sector faced significant pressure from FPIs in February, marking one of the largest monthly outflows in recent times.
- IT stocks saw ₹16,949 crore in outflows during February.
- The selling was front-loaded, with ₹10,956 crore offloaded in the first half of the month.
- In the second half, FPIs sold an additional ₹5,993 crore in IT shares.
This followed January’s outflows of ₹1,835 crore in IT stocks, indicating a continuing trend of foreign investors reducing their exposure to the sector.
As a result, FPIs’ total investment in IT stocks dropped sharply by 21.76%, declining to ₹4,17,719 crore at the end of February from ₹5,33,953 crore in January.
The Nifty IT index mirrored this trend, recording a nearly 20% decline over the month.
Company Details: Sector-Wise FPI Activity
FPIs were not just active in IT stocks; other sectors also saw notable inflows and outflows.
Sectors With FPI Outflows
- Consumer Services: ₹4,172 crore
- FMCG: ₹1,951 crore
- Telecommunication: ₹1,881 crore
- Consumer Durables: ₹756 crore
These sectors witnessed moderate selling, though the IT sector remained the primary area of concern for FPIs.
Sectors With Strong FPI Inflows
- Capital Goods: ₹12,135 crore
- Financial Services: ₹8,418 crore
- Metals & Mining: ₹5,638 crore
- Oil, Gas & Consumable Fuels: ₹5,381 crore
- Power: ₹4,506 crore
- Construction: ₹4,487 crore
- Automobile & Auto Components: ₹3,586 crore
The inflows indicate a shift in FPI focus towards infrastructure, industrials, and financials, suggesting confidence in sectors beyond IT.
Summary
February’s FPI activity presents a clear story of selective investment:
- IT sector: Heavy selling, nearly ₹17,000 crore outflows, Nifty IT down 20%
- Overall FPIs: Net buyers with ₹22,615 crore inflows across Indian equities
- Other sectors: Capital Goods, Financial Services, Metals & Mining, and Oil & Gas led inflows
- Consumer sectors: Moderate outflows, including Consumer Services, FMCG, Telecommunication, and Consumer Durables
The month demonstrates how FPIs are adjusting portfolios amid sector-specific concerns while maintaining an overall positive stance on Indian equities.
Source: Livemint
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