Foreign Institutional Investors Maintain Selling Streak in Financial Stocks, Offload Over 11,700 Crores in April's Second Half

Foreign Investors Continue Selling Spree in Indian Markets

Foreign investors continued to offload financial stocks in the second half of April, selling over Rs 11,700 crore, following a similar trend in the first half of the month where they sold over Rs 19,150 crore. This comes after selling a staggering Rs 60,655 crore in financial stocks in March alone, with the pace of selling in the sector showing no signs of abating.

The financial sector has been under pressure due to concerns that rising sovereign bond yields, which remained above 7 percent in March and April, could lead to mark-to-market losses on their government securities portfolios. The rising bond yield is attributed to escalating geopolitical tensions, the ongoing US-Iran-Israel conflict, and higher crude oil prices, which have revived inflation concerns.

The Reserve Bank of India's (RBI) actions in the currency market, along with the broader economic impact of rising energy costs, have also affected the outlook for the sector. The central bank's efforts to defend the rupee near record lows have constrained liquidity injection, tightening financial conditions and potentially weighing on banks in the coming quarters.

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Comparison of FII Outflows by Sector

Beyond the financial sector, foreign investors also sold stocks in other sectors, including oil and gas, IT, healthcare, consumer services, telecom, auto, and construction materials. However, they showed selective buying interest in the power and capital goods sectors, purchasing Rs 4,956 crore and Rs 4,667 crore respectively.

Foreign investors have been continuous sellers in Indian markets, with outflows of Rs 2 lakh crore so far in 2026. Factors contributing to this trend include stretched valuations, geopolitical tensions surrounding the US-Iran-Israel conflict, and the lack of AI-related investment opportunities in India. The rise in crude oil prices above $100 per barrel has further fueled inflation fears and fiscal pressure, further dampening FII interest in Indian markets.

Read also: US-Iran Tensions Spark Uptick in Oil Prices Amid Global Market Decline