Mumbai: Overseas investors sold Indian equities worth ₹15,569 crore across 10 sectors between December 16 and 30. The oil & gas sector witnessed the highest outflows worth ₹5,489 crore, after foreign investors sold ₹5,337 crore in the first half of the month. Between January and November, foreign investors offloaded shares worth ₹45,514 crore. "While the FPI selling has been across sectors, oil & gas is likely to have witnessed outflows as Reliance, which is a major stock in the sector, has been an underperformer in the last few months," said Siddharth Bhamre, head of institutional research at Asit C Mehta Intermediates. Bhamre said that oil marketing companies such as HPCL and BPCL are witnessing profit booking after gains, and stocks such as Indraprastha Gas and Mahanagar Gas are under pressure as they are not expected to get subsidised gas anymore. Slowing economic activity mainly in China has put a lid on oil prices with Brent crude futures at $76.78 a barrel, down 5.4% in the past three months. 117006672Overseas investors have traditionally had relatively large exposure to oil & gas stocks because of their prospects and liquidity, said UR Bhat, cofounder at Alphaniti. "But, the uncertainty over oil prices is heightened due to the escalation of the conflict in the Middle East, which could have led them to reduce exposure to the sector," Bhat said. Financial services saw a shift in sentiment as overseas investors pulled out ₹4,338 crore in the second half of the month after they purchased over ₹7,000 crore in the first half."Since overseas investors have major holdings in the financial services sector, their flows move in tandem with how the market moves," said Bhamre. "If the market does well or is stable as it was in the first half of December, then they deploy funds in this sector and vice versa." In the last 15 days of 2024, global investors dumped shares worth ₹2,548 crore in the automobile sector and sold over ₹1,000 crore in power and fast-moving consumer goods (FMCG) sectors each.“The sentiment towards auto companies may shift as they have been resilient, but FMCG companies’ commentary so far has been subdued,” said Bhat. Bhamre said that while December auto sales were strong, it might be a one-off occurrence given the huge discounts and inventory clearing that may not sustain in subsequent sales. “FMCG is expected not to correct a lot going forward even if markets correct as rural demand is likely to be supportive,” said Bhamre. “Additionally, it could also be a defensive play for foreign investors.” FPIs infused funds worth `8,249 crore across 13 sectors in the last 15 days of December. Foreign buying was the highest in the IT sector, where foreign investors bought shares worth `2,296 crore. They had bought shares worth `6,754 crore in the first half of the month and from the period between January to November, they purchased shares worth `5,864 crore. “In a scenario where the dollar is strengthening and US economy is robust, the IT sector becomes a hedge for investors, which could explain the foreign inflows in December,” said Bhamre. Healthcare and services sectors witnessed foreign buying worth `1,850 crore and `1,211 crore, respectively
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