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FPIs Dump IT, Bet Big on Banks & Infrastructure
9 Mar
Summary
- FPIs shifted ₹5,993 crore from IT to financials in late February.
- AI disruption concerns drove the significant outflow from IT.
- Capital goods and auto sectors saw substantial foreign inflows.
Foreign portfolio investors (FPIs) are actively rebalancing their Indian portfolios. In the latter half of February, global funds divested ₹5,993 crore from the information technology sector. This significant outflow was primarily driven by concerns regarding potential disruptions from artificial intelligence.
In contrast, the financial services sector has become an attractive destination, drawing ₹2,243 crore in late February and ₹8,418 crore for the month overall. This shift highlights a growing preference for financials as a defensive strategy amidst market uncertainties.
Beyond financials, capital goods, automobiles, and construction sectors are experiencing robust foreign investment. Capital goods alone received ₹4,103 crore in late February. This rotation underscores a trend of FPIs favoring sectors linked to capital expenditure and infrastructure development.
