FIIs continue financial stock selloff, offload ₹23,141cr in May

FIIs continue financial stock selloff, offload ₹23,141cr in May

Foreign institutional investors (FIIs) have continued their selling spree in Indian financial services stocks for the third consecutive month. In May, they offloaded shares worth ₹23,141 crore.

However, this is an improvement over April's heavy outflows of ₹30,856 crore and March's ₹60,655 crore.

The trend is largely attributed to a global shift toward the US amid high bond yields and dollar strength.

Factors driving FII outflows

The global shift toward the US is driven by high bond yields, a strong dollar, and the race to capture AI momentum.

Concerns over slowing credit growth, stretched valuations in Indian financials, and geopolitical tensions have added to the selling pressure.

High-weightage banking and financial services stocks have been major targets for profit-booking amid these market dynamics.

Other sectors witnessing FII selling

The selling trend wasn't limited to financials alone. The oil and gas sector saw FII outflows of ₹8,978 crore in May, after ₹6,703 crore in April and ₹4,129 crore in March.

FMCG and auto sectors also witnessed selling worth ₹3,561 crore and ₹2,532 crore, respectively, during the month under review.

Consumer durables and construction materials recorded outflows of ₹1,449 crore and ₹1,641 crore, respectively, during May.

Sectors attracting FII buying

Despite the broad-based selloff, some sectors managed to attract FII buying.

The services sector drew investments worth ₹7,204 crore in May while capital goods attracted inflows of ₹2,799 crore.

Metals and mining also saw modest net purchases of ₹667 crore during this period.

These sectors provided a glimmer of hope amid an otherwise challenging market environment for investors.