The selling streak by Foreign Institutional Investor (FII) continued in the Indian stock market in December. So far in the current month, FIIs have taken Rs. More than 22,000 crores have been withdrawn. Notably, foreign investors remained very aggressive sellers in the first fortnight of December, leading to pressure in several major sectors.
Outflows of FIIs in key sectors such as financial services, IT services, healthcare, power, FMCG and capital goods have dampened market sentiment. The financial services sector was hit the hardest by FII selling in the first two weeks of December. Foreign investors withdrew over ₹6,516 crore from the sector during this period.
In comparison, FIIs sold financial stocks worth over ₹3,100 crore in November. A sell-off in the sector for the second month in a row shows that foreign investors are currently taking a cautious stance towards banking and financial stocks.
After the financial sector, information technology (IT) and services sectors also witnessed selling pressure from FIIs. The first fortnight of December saw an outflow of around ₹ 3,300 crore in these 2 sectors. However, FII outflows from the IT sector were higher in November, with sales of around ₹5,794 crore. Meanwhile, services sector saw a withdrawal of around ₹ 980 crore in November.
Healthcare and power sectors were not left out of FII selling in December. In the first half of December, foreign investors sold over ₹2,351 crore in healthcare stocks and about ₹2,118 crore in power sector stocks. November also saw a sell-off in both sectors, with withdrawals of ₹ 1,783 crore from healthcare and ₹ 2,615 crore from power.
The FMCG sector also remained under pressure from foreign investors. In the first fortnight of December, FIIs disinvested around ₹1,419 crore from the sector. However, this selling was much higher in November, when FIIs sold shares worth ₹4,764 crore in FMCG stocks.
The capital goods sector saw sales of around ₹ 1,218 crore in December. This is significant, as FIIs were net buyers in the sector in November, investing ₹2,495 crore, which means that the trend has reversed in a single month.
The telecom sector also witnessed a sudden change in FII sentiment. The sector saw significant buying of ₹14,326 crore in November, while FIIs withdrew ₹879 crore in the first half of December. Additionally, FII outflows of around ₹ 1,126 crore were recorded in the construction sector and around ₹ 670 crore in the real estate sector.
Selling pressure remained in most sectors but FIIs made selective purchases in some sectors. The oil and gas sector was at the forefront of this. In the first fortnight of December, foreign investors invested around ₹3,000 crore in the sector. However, the figure was higher in November, when ₹7,169 crore was purchased.
Additionally, FIIs invested around ₹ 807 crore in the metal sector and ₹ 611 crore in the auto sector. It may be noted that in November, the sector saw sales of ₹ 680 crore and ₹ 1,642 crore respectively.
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