Rs 6,000 crore gone! FIIs are seen leaving with bags full of cash from two different industries.
- ByStartupStory | November 10, 2022
NEW DELHI: Although the outflow of foreign money from Dalal Street was modest in the month of October, totaling just 8 crore rupees, FIIs withdrew almost 6,100 crore from only two industries: oil and gas and financial services. After making a net withdrawal of 1,673 crore rupees from the financial sector in September, foreign institutional investors were net sellers in the sector to the tune of 4,686 crore rupees in October. Banks are FIIs’ greatest bet on Dalal Street, followed by information technology as their second largest investment. Banks are often seen to be a proxy for the growth narrative in India. In addition, outside investors withdrew a total of 1,418 billion rupees from the oil and gas industry. Aside from that, the real estate, fast-moving consumer goods, and services sectors also suffered outflows.
Foreign institutional investors (FIIs)
On the other side, foreign institutional investors (FIIs) opted to buy the drop in IT equities, resulting in a net purchase of 945 crore rupees. During the month of September, they participated in the industry as sellers to the tune of almost 9,200 crore Indian rupees. The construction industry made the most purchases (Rs 1,289 crore), followed by the electricity industry (Rs 977 crore).
Should you be concerned about FIIs?
Despite the selling by FII, there was substantial price momentum witnessed in bank stocks. This was driven by the positive operational performance that was reported by banks. Over the last month, Nifty Bank has increased by more than 6% thanks to the efforts of regional commercial banks and public sector banks.
“The majority of banks have reported robust credit growth, and those banks that have a substantial proportion of loan portfolios with variable interest rates have also recorded moderate margin expansion. The robust operational performance that was achieved as a consequence is likely to have acted as a tailwind for the stocks. The quality of the assets has remained unremarkable, “Kotak Institutional Equities remarked.
Analysts have a positive outlook on public sector banks as a result of their strong quarterly performance, which was driven by an excellent asset quality trend and a pick-up in lending expansion. A ramp-up in credit growth and the ability to maintain margins in an environment with increasing interest rates are likely to drive valuations for banks and non-bank financial companies moving forward, according to a statement made by Axis Securities. “We believe that the asset quality pain is largely behind (barring certain segments),” the statement read, “and the restructured book is behaving fairly well.” The brokerage firm has a rating on BFSI with ICICI Bank NSE 1.35% that is equivalent to its weight.
Follow Startup Story
Related Posts
