Foreign institutional investors (FIIs) continued to trim exposure to defensives and large-cap sectors in the first half of January, while selectively adding to cyclicals.
Key FII Trends (NSDL Data):
- FMCG:
FIIs sold over Rs 6,128 crore worth of FMCG stocks in the first half of January, extending the selling seen in December when net outflows stood at more than Rs 5,844 crore. - Financial Services:
Heavy selling persisted, with FIIs offloading over Rs 3,190 crore in January’s first half, following substantial net sales of Rs 10,525 crore in December. - IT:
The IT sector also witnessed continued FII outflows amid concerns over global demand, US interest rates, and cautious client spending.
Sectors Attracting FII Buying:
- Metals:
Buying interest picked up on expectations of global demand recovery and supportive commodity prices. - Consumer Durables:
FIIs selectively added positions, aided by hopes of improving domestic consumption and stable margins.
Market View:
The data suggests FIIs are rotating away from expensive defensives like FMCG and financials, while increasing exposure to cyclical and consumption-linked sectors. However, sustained inflows may depend on currency stability, global risk appetite, and clarity on interest rate trajectorie
