FIIs bet big on financials, telecom, chemicals, metals in second half of March, exit IT, FMCG & oil & gas

Investments Indian Investments

Posted by NewAdmin on 2025-04-04 08:50:38 |

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Foreign institutional investors (FIIs) have shown a renewed interest in Indian equities, particularly in the financial sector, during the second half of March. According to data from the National Securities Depository Limited (NSDL), FIIs invested significantly in Indian stocks after mid-March, with a substantial portion of this investment directed towards financial services. Out of the total investment of over Rs 26,000 crore during this period, approximately Rs 17,000 crore was channeled into financial stocks. This shift marks a notable change from the beginning of 2025 until March 15, when FIIs collectively sold over Rs 38,000 crore worth of financial shares. 

The timing of this investment surge is linked to the upcoming March quarter earnings season, which is expected to reflect robust performance from the financial sector. Experts anticipate that Indian banks will report increased treasury income in the fourth quarter of FY25. This optimism stems from a noticeable decline in government securities yields and gains from foreign exchange operations amid ongoing market volatility. As a result, FIIs have strategically positioned themselves ahead of what could be a favorable earnings season for banks and other financial institutions.

In addition to the financial sector, FIIs maintained their bullish stance on telecom, chemicals, and metals and mining industries. These sectors have continued to attract foreign investments as they offer growth prospects amid evolving global economic conditions. Notably, FIIs also began investing in healthcare, power, capital goods, and automobile sectors after a phase of consistent selling. This diversified investment approach indicates a strategic realignment by foreign investors as they seek to capitalize on emerging opportunities across various industries.

Conversely, certain sectors remained out of favor during this period. FIIs continued to offload stocks in oil and gas, information technology (IT), consumer services, and the fast-moving consumer goods (FMCG) sectors. The divestment from these industries reflects concerns over profitability and growth, particularly in the IT sector, which has faced challenges due to global economic uncertainties and fluctuating demand for digital services.

This trend highlights the dynamic investment strategies employed by FIIs, who are increasingly focusing on sectors poised for recovery or growth while reducing exposure to industries perceived as risky or stagnant. As the earnings season progresses, the true impact of these investment shifts will become clearer, offering insights into the evolving preferences of foreign investors in the Indian equity market.

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