Having pulled out Rs 1,673 crore from financials in September, FIIs were net sellers to the tune of Rs 4,686 crore last month in the sector. Often considered as a proxy to the India growth story, banks are the largest bet of FIIs on Dalal Street, followed by IT.
Foreign investors also pulled out Rs 1,418 crore from the oil & gas sector. Other than that, realty, FMCG and services sector also saw outflows.
On the other hand, FIIs chose to buy the dip in IT stocks with net buying of Rs 945 crore. They were sellers to the tune of nearly Rs 9,200 crore in the month of September in the sector. The biggest buying was seen in construction (Rs 1,289 crore) and power (Rs 977 crore).
Should FIIs worry you?
Driven by healthy operating performance reported by banks, strong price momentum was seen in bank stocks despite the FII selling. Led by regional private banks and PSU banks, Nifty Bank is up over 6% in the last one month.
“Most banks have reported healthy credit growth and those with a high share of floating rate loan portfolios have reported modest margin expansion as well. The resultant strong operating performance has probably provided a tailwind to the stocks. Asset quality has continued to be benign,” Kotak Institutional Equities said.
Analysts are bullish on PSU banks on account of their robust quarterly performance led by superior asset quality trend and the pickup in credit growth.
“We believe with the asset quality pain being largely behind (barring certain segments) and the restructured book behaving fairly well, a ramp-up in credit growth and the ability to maintain margins in an increasing interest rate environment is likely to drive valuations for Banks/NBFCs moving forward,” Axis Securities said. The brokerage has an equal-weight rating on BFSI with
, , and among top picks.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
