Dalal Street seems to be off synch with the covid crisis raging in the country with the benchmarks gaining over 4% in the last one month. This is in sharp contrast to the collapse of the market when the infection first hit the country in March 2020.
Even as domestic investors continue to bet on the long term foreign institutional investors (FIIs) have pulled out $1.29 billion from the Indian stock markets. The FII selling is the highest since the beginning of the pandemic in India. This is in sharp contrast to FIIs pumping in $26.8 billion in equities in six months to March 2021.
So what is out of favor with FIIs? Banking and financials saw the highest outflows in April at $ 1.12 billion followed by oil and gas ($466 million) and metals and mining ($ 242 million).
FIIs were reallocating their money to defensives and value stocks. The two sectors that continue to see the highest inflow for the last two months are—FMCG and surprisingly realty. FMCG stocks saw an inflow of $244 million in April and $516 million in the previous month. In April, FIIs put in $213 million and $710 million in the previous month in real estate companies.