Foreign institutional investors are bullish on Indian sectors, pouring billions

As per NSDL data for the second half of June 2024, amid a significant rally in Indian equity markets, Foreign Institutional Investors (FIIs) have shown a strong bullish bias towards key sectors. FIIs have invested significantly in various sectors, reflecting growing confidence in India’s economic resilience and market potential.

Foreign investors have invested Rs 8.162 billion in the financial services sector, indicating strong confidence in the Indian banking system and development of financial technologies amid global economic uncertainty.

The telecom sector received Rs 6,208 crore in FII investments, driven by 5G technology advancements and digital infrastructure expansion, which played a key role in India’s digital transformation.

Investments totalling Rs 3,097 crore in consumer services underscore FIIs’ focus on rising consumer spending in India and changing lifestyles spanning retail, e-commerce and hospitality.

An amount of Rs 2,929 crore flowed into the capital goods sector, supporting India’s manufacturing potential and infrastructure development under the Make in India initiative.

With an investment of Rs 2,886 crore in the healthcare sector, it is clear that foreign investors are focusing on improving healthcare infrastructure as well as advancing pharmaceuticals and biotechnology.

Investments were also recorded in sectors such as automobile (Rs 2,054 crore), IT (Rs 1,578 crore), construction materials (Rs 1,475 crore), oil and gas (Rs 1,048 crore), consumer durables (Rs 1,048 crore) and chemicals (Rs 1,048 crore), indicating the diversified interest of foreign investors.

However, foreign investors remained net sellers in energy (sales of Rs 2,439 crore), metals (Rs 1,128 crore) and fast-moving consumer goods (FMCG) (Rs 677 crore), reflecting sectoral challenges amid global economic dynamics.

Despite global challenges such as inflation and geopolitical tensions, India’s stable macroeconomic environment, good growth prospects and investor-friendly policies continue to position the country in a favourable position for foreign investment.

The significant inflow of foreign capital in June 2024 underlines India’s resilience and attractiveness as an investment destination, bolstering confidence in the country’s economic fundamentals amid global instability.