Domestic benchmark indices ended October 13 in the red. The BSE Sensex declined 125.65 points, or 0.19 percent, and ended the first half of October at 66,282.74 Similarly, the NSE Nifty 50 declined 42.95 points, or 0.22 percent, to 19,751.05.
Despite the fall in the index, Global investors are looking at India as an attractive investment for a long-term growth perspective as an alternative to China, So Foreign institutional investors are pouring money into India, picking stocks carefully in the market.
This year, foreigners have invested over $14.02 billion in the Indian stock market, and after six months of purchasing, Foreign Portfolio Investors withdrew almost Rs. 5,559.88 Crores in October.
The Power sector had the largest outflow of FPI funds in the first half of October 2023 at Rs. 2,083 Crores, followed by the construction sector which saw an outflow of Rs. 1,579 Crores, Information Technology sector saw an outflow of Rs. 1,539 Crores.
Capital goods sector saw the highest FII Inflow in the first half of October.
Here are the three sectors that have seen huge outflow of FII funds in October
Power Sector
The Indian government plans to use renewable energy sources in order to achieve net zero emissions by 2070. Furthermore, the Ministry of Power expects that by 2030, the country will be able to meet 62 percent of its energy demands using non-fossil fuel sources reaching 500 GW.
FII Capital outflows from the power sector were Rs. 2,083 Crores in the first half of October month. The S&P BSE Power Index has given 23 percent returns over the last six months.
Here are the major stocks in this sector: NHPC, Torrent Power, Inox Wind Energy Ltd, Power Grid Corporation of India Ltd, and Adani Green Energy Ltd.
Information Technology Sector
The IT industry contributed 7.4 percent of India’s GDP in FY22 and is expected to contribute 10 percent by 2025. India’s IT spending is anticipated to rise to US$ 110.3 billion in 2023, up from an estimated US$ 81.89 billion in 2021.
FII Capital outflows from the Information Technology sector were Rs. 1,539 Crores in the first half of October month. The S&P BSE Information Technology index has given 20 percent returns over the last six months.
Here are the major IT stocks in this sector such as TCS, Tech Mahindra, LTIMindtree, and Infosys.
Construction Sector
The construction sector in India is considered 3rd among the 13 major economic sectors and is the second-largest employment generator after the agriculture sector. If everything goes well, the construction industry’s contribution to the GDP of India will be 12-15% by the end of 2025
FII Capital outflows from the Construction sector were Rs. 1,579 Crores in the first half of October month. The S&P BSE Realty index has given 40 percent returns over the last six months.
Here are the major construction stocks in this sector such as Sobha, DLF, DB Realty and Godrej Properties.
The sector which has gained the highest FII Investment in the first half of October is Capital goods sector
Capital goods sector
This sector was seen as a favourite sector for FIIs in the first half of October month, and this sector has seen consistent inflows over the last Nine months. The S&P BSE Capital goods sector has gained 34 percent over the last six months.
FII Capital inflows in the Capital goods sector were Rs. 1,847 Crores in the first half of October month.
Capital Goods has a market size of $43.2 billion in India. The capital goods industry is divided into ten sub-sectors, with electrical equipment being the largest, followed by plant equipment and earthmoving/mining machinery.
Written by Bharath KS
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