FPI buying in financial shares hits six-month high in October

Foreign portfolio investors (FPIs) significantly increased their exposure to India’s financial sector in October, purchasing shares worth $1.5 billion (Rs13,279 crore) — the highest level of investment in the segment in the past six months, according to data from the National Securities Depository Limited (NSDL).The strong inflows into financial stocks reflect renewed investor confidence in India’s banking and non-banking financial companies amid steady credit growth, robust earnings, and improving asset quality.In addition to the financial sector, FPIs also bought shares worth $1 billion (Rs9,129 crore) in the oil and gas segment and $355 million (Rs3,147 crore) in metals and mining during the month. These inflows suggest that global investors are favouring sectors linked to India’s infrastructure expansion and energy transition story.
However, FPIs were net sellers in consumer-facing sectors such as FMCG, consumer services, healthcare, and information technology, reflecting a sectoral rotation toward cyclical and value-oriented segments amid rising expectations of rate cuts by major central banks.Overall, after a three-month hiatus, FPIs turned net buyers in Indian equities in October, investing a total of $1.6 billion (Rs14,610 crore). Analysts attribute the reversal in flows to stabilising U.S. bond yields, easing global inflation concerns, and India’s resilient macroeconomic fundamentals.Market experts say the sustained buying in financials could continue if domestic demand remains strong and credit growth sustains its momentum. They also note that the renewed FPI participation reinforces India’s status as a preferred investment destination among emerging markets.

(Business Correspondent)