Even as foreign investments in Indian equities remained patchy in 2024, Foreign Portfolio Investors (FPIs) were quite severe on two sectors viz. financials and oil & gas where they sold shares worth over Rs 1 lakh crore. They have been net sellers in a month on five occasions while remaining net buyers seven times.As on December 20, 2024, they had bought domestic shares worth Rs 6,770 crore.January, April, May, October and November months witnessed FPI outflows with October witnessing maximum sell-off of Rs 94,017 crore. Meanwhile in January and May, outflows of more than Rs 25,000 crore were seen. Meanwhile, highest inflows of Rs 57,724 crore were seen in September followed by March and July when FIIs purchased shares worth Rs 35,098 crore and Rs 32,365 crore, respectively.<iframe title="Month-wise FII Inflows" aria-label="Table" id="datawrapper-chart-4Rrml" src="https://et-infographics.indiatimes.com/graphs/4Rrml/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="591" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}();</script>FPI sector dataSectorally, FIIs punished financials the most, selling shares worth Rs 53,942 crore in 2024 so far. In January and October, the highest selling of Rs 30,013 crore and Rs 26,139 crore took place. They were net buyers in financials on four occasions with the highest buying seen in September at Rs 27,200 crore.Oil & Gas was another sector at the receiving end of investors’ ire. They have sold Rs 50,851 crore worth shares as on December 15, 2024. A lion’s share (Rs 34,790 crore) was sold in just two months viz. October and November. Others including FMCG, automobile & auto components, construction, media & entertainment, metals & mining and power saw outflows of Rs 19,057 crore, Rs 14,148 crore, Rs 20,163 crore, Rs 2,244 crore and Rs 799 crore, respectively. <iframe title="CY24 Flows: Sectoral Snapshot" aria-label="Column Chart" id="datawrapper-chart-aqK5V" src="https://et-infographics.indiatimes.com/graphs/aqK5V/1/" scrolling="no" frameborder="0" style="width: 0; min-width: 100% !important; border: none;" height="411" data-external="1"></iframe><script type="text/javascript">!function(){"use strict";window.addEventListener("message",(function(a){if(void 0!==a.data["datawrapper-height"]){var e=document.querySelectorAll("iframe");for(var t in a.data["datawrapper-height"])for(var r=0;r<e.length;r++)if(e[r].contentWindow===a.source){var i=a.data["datawrapper-height"][t]+"px";e[r].style.height=i}}}))}();</script>Among the sectors that saw inflows were capital goods (Rs 29,011 crore), consumer services (Rs 20,228 crore), healthcare (Rs 26,506 crore), information technology (Rs 12,618 crore), realty (Rs 20,181 crore) and telecommunications (Rs 23,992 crore).FPI 2025 outlookExpert V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services expects moderate returns in 2025. He expects India to post a better GDP growth in Q3 and Q4 helped by higher government capital expenditure, prompting FIIs to turn positive on Indian markets.The country's 5.4% Q2 GDP growth was a seven quarter low and was significantly lower than the Street’s estimates as weaker consumption, subdued government spending, and adverse weather impacts on key industries impacted the July-September quarter earnings of the listed companies. It stood at 8.1% in the year ago period.The Nifty universe posted a single-digit YoY growth in Q2 net profit at 4%.Sectorally, Vijayakumar’s top pick is financials and in this, largecap banks along with new age digital platform companies whose performance will not be impacted by the growth slowdown in the economy in his view. Other favourites include pharmaceuticals and select autos.FMCG and metals will be weak initially, the Geojit analyst said while expecting metals to bounce back if the Budget 2025 imposes protective tariffs on metal imports.On the outlook for 2025, Sunil Damania, Chief Investment Officer at MojoPMS sees India’s slowing economic momentum to be the biggest risks to corporate earnings growth. "If these economic headwinds persist, sustaining current high valuations could be challenging. Geopolitical uncertainties, including potential policy shifts in the US, may also weigh on market sentiment. Given these factors, we expect the market in 2025 to be more stock-specific, with selective sectors driving performance rather than a broad-based rally," Damania said.He warned investors to prepare for a more challenging environment compared to the "relatively straightforward gains of 2024".His top sectoral bets are banking and FMCG even as he pinned his hopes on sound domestic and export market opportunities which could drive inflows in the pharma & healthcare sector.He remains uncertain about real estate while seeing muted inflows in the IT sector. Also Read: Year-ender 2024: Zaggle, Oracle and 5 other SMIDs rule IT sector in CY24 with up to 150% returns. How about 2025?Trump ConundrumPresident-elect Donald Trump who will assume charge as the US President remains the biggest conundrum. His stance on tariffs is expected to increase inflation.The US Federal Reserve's hawkish tone on Wednesday and the likelihood of shallower rate cuts in 2025, hit the domestic markets over the last two sessions. Chair Gerome Powell said that the Central Bank's 2% inflation target was unlikely to be achieved in 2025. Damania sees the Trump administration's policies on tariffs and trade agreements to hold a key. "Investors should avoid speculative bets based solely on geopolitical events. Instead, focus on domestic-driven sectors that are less sensitive to global trade disruptions. This approach ensures stability regardless of external market fluctuations," is Damania's advice to investors.(Inputs from Ritesh Presswala)(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of the Economic Times)
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