During the first half of July, overseas investors continued to show confidence in the Indian stock market by investing in banking and financial services stocks. Approximately Rs 7,050 crore, which accounted for 23% of the total Foreign Portfolio Investor (FPI) inflows, was directed towards these sectors between July 1 and 15. This trend continued from the previous month, where FPIs had invested Rs 18,704 crore in June.
In the first half of July, FPIs purchased shares worth Rs 30,662 crore. The positive sentiment surrounding banks and financial services firms can be attributed to their better-than-expected earnings growth in the March quarter, along with further margin expansion. Additionally, these companies have displayed improved asset quality and continued growth in the June quarter.
Apart from banking and financial services, FPIs also showed interest in the oil and gas sector, investing Rs 3,891 crore in stocks. This followed their sale of shares worth Rs 16,465 crore between January and June 2023. The profitability of oil marketing companies such as HPCL, BPCL, and IOC is expected to improve in the June quarter due to higher marketing margins. However, the performance of upstream Public Sector Undertakings (PSUs) may be subdued due to lower crude oil realizations.
Furthermore, FPIs also made substantial investments in various other sectors. They purchased shares worth over Rs 2,000 crore each in FMCG, power, capital goods, telecom, and consumer durables. These investments indicate the optimism of overseas investors towards the Indian market and their confidence in the growth potential of these sectors.
Overall, the influx of foreign investments in banking and financial services stocks, as well as other sectors, is a positive indicator of the global investor sentiment towards the Indian market.
