MUMBAI: Foreign portfolio investors (FPIs) turned net positive on total financial service equities during the fortnight ended January 15, the first such period since the fortnight ended October 15 last year, implying that financials, especially banks, could outperform other sectors, going forward.
FPIs invested Rs 1,389 crore in financial services equities during the fortnight ended January 15. The net figure includes purchases of Rs 1,920 crore in the banking sector and sales of Rs 531 crore in other financial services (excluding banks) such as housing finance companies, NBFCs, and asset management companies, as per National Securities Depository Ltd (NSDL) data.
The preference for financial services, especially banks, is interesting against the backdrop of their having sold Indian shares worth Rs 15,766 crore or $2.1bn so far this month. Analysts like Rohit Srivastava, founder, IndiaCharts, attribute their shifting to financials on expectations of a pick-up in credit growth, thanks to an economic recovery amid signs of a possible abatement of the pandemic.
During the October 15 fortnight last year, the net purchased Rs 537 crore in total financial services, of which banks accounted for Rs 1,284 crore and other financial services to a negative Rs 747 core.
Their equity assets under custody in financial services’ jumped to Rs 15.26 lakh cr in the Jan 15 fortnight from Rs 14.26 lakh cr in the previous fortnight. Apart from cash market sales, they also turned bearish on index futures — largely Nifty — last Friday for the first time since Nov 10, 2021.On January 25, just ahead of the US Fed meet, they were net short 20778 index futures contracts along with being sellers in the cash market.