FPIs Divest from Financials, IT, and FMCG Shares in May: What’s Next for BTC and ETH?

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    <li>The foreign portfolio investors (FPI) continued their selling spree in the Indian stock market during May, dumping financial services, IT and FMCG sector stocks the most.</li>
    <li>The total selling by FPIs in the domestic equities since the beginning of 2024 amounted to over ₹19,000 crore so far, as per data available on National Securities Depository Ltd (NSDL).</li>
    <li>“Large investors are likely to be taking out profits after the recent rally in the share prices along with the sectoral rotation," said Avinash Gorakshakar, Head Research, Profitmart Securities.</li>
</ul>
<p><strong>FPIs continue to dump financials, IT, FMCG shares in May. What lies ahead?</strong></p>
<h2><strong>FPI Selling Intensifies in Financial Services Sector</strong></h2>
<p>The highest FPI outflows were seen in the financial services stocks worth ₹9,687 crore during the first fortnight of May 2024 (May 1 to May 15). This was after FPIs sold ₹12,550 crore in the sector during April 15 - April 30. Overall, FPIs dumped financial services stocks worth around ₹55,000 crore in 2024 so far, the NSDL data showed.</p>
<h3><strong>IT and FMCG Sectors Also Witness Heavy Outflows</strong></h3>
<p>Overseas investors also continued to sell heavily Information Technology (IT) sector shares during the first fifteen days of May. They sold IT sector stocks worth ₹5,574 crore during the period. Earlier, they had offloaded IT sector shares to the tune of ₹9,573 crore in the month of April.</p>
<p>The FMCG sector also continued to witness FPIs outflows at ₹1,158 crore in the first fortnight of May after outflows worth ₹7,914 crore last month.</p>
<h3><strong>Conclusion</strong></h3>
<p>In conclusion, while FPIs have been aggressively selling off their holdings in the financial services, IT, and FMCG sectors, experts believe this is largely driven by profit-booking and sectoral rotation. The fundamentals of the financial sector remain strong, and the growth prospects are robust. However, caution is advised in the IT sector due to global headwinds. As the Indian stock market hits record highs, investors should remain selective and vigilant about valuations. The debt market, on the other hand, has seen positive inflows, which are expected to continue post-election results.</p>