Priyanka Tiwari
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Due to sharp corrections in the Indian stock market and sustained selling by foreign institutional investors (FIIs), the assets of FII investors plummeted to a 13-month low in February. This indicates that FII assets under custody (AUC) experienced a notable drop.
As of February, FIIs' AUC was valued at Rs 62.38 lakh crore, the lowest amount recorded since January 2024. This figure depicts a steep decrease of Rs 15.58 lakh crore from the peak amount of Rs 77.96 lakh crore registered in September 2024.
FIIs further sold-off Rs 78,027 crore in January and Rs 34,574 crore in February in the Indian markets. Notably, in the first half of February, the selling pressure was much higher as FIIs sold-off Rs 21,272 crore while the second half of the month experienced a lower sell-off of Rs 13,302 crore.
Looking at specific sectors, the auto sector led the sell-off charts with a negative FII balance of Rs 3,279 crore followed by the healthcare and FMCG sectors with sell-off balances of Rs 2,996 crore and Rs 2,568 crore, respectively.
Here is the division for other sectors which faced heavy selling; construction materials Rs 1,820 crore, Financials Rs 1647 crore, Construction Rs 1465 Hor, Capital goods Rs 1258 crore. Further consumer durables were sold off for Rs 1241 crore, Power for Rs 1234 crore, Oil & gas for Rs 943 crore.
On the contrary, their spending increased in the Telecom, Chemicals, and Media sectors where the biggest gains were in Telecom, where FIIs purchased shares worth Re 5661 crores, followed by chemicals at Rs 112 crores and media at Rs 34 crores.
Indian Markets are always known for the volatility and this February was no different as the benchmark Sensex and Nifty had a downslide of 5.6 and 5.9 percent respectively. The mid sector and small cap indices are considerably looser with a broader charge around 13 percent.
Even so, analysts warn that signs of a reversal in the selling trend still remains elusive. While oversold markets could experience a short-term technical rally, they believe that FIIs will not support this recovery. According to some experts, the outflow continues due to the ailing economic growth, poor performance by corporates, and high inflation. Moreover, the presence of good returns without any risk in markets such as the US has made FIIs shift their focus from India.
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