Foreign investors boost purchases of India's financial shares in April
May 7 (Reuters) - Foreign portfolio investors scooped up India's financial stocks in the second half of April, which saw the third-highest monthly inflows into the sector, data from the National Securities Depository showed on Wednesday.
FPIs bought 184.09 billion rupees ($2.18 billion) of shares of financial firms in April, helping the Nifty Financial Services index (.NIFTYFIN), opens new tab rise 4.1%.
Inflows of $2.71 billion in the second half of April were the highest on record for a fortnight.
In April, foreign investors net bought Indian shares for the first time in 2025, pushing the benchmark Nifty 50 index (.NSEI), opens new tab 3.5% higher.
"The reversal of foreign outflows is attributed to easing global trade tensions, expectations of a U.S.-India trade agreement and attractive valuations," Bajaj Broking said in its monthly market outlook.
The buying streak may continue if India's economic outlook remains strong, it said.
The U.S. paused its reciprocal tariffs on April 9, and signalled during the month that a bilateral trade deal with India will be announced soon.
Better than expected earnings from India's top private banks, HDFC Bank (HDBK.NS), opens new tab and ICICI Bank (ICBK.NS), opens new tab, also lured money into the sector, according to two analysts.
India's consumer and telecom stocks also saw foreign buying in April, while most other major sectors saw an exodus.
Information technology stocks saw outflows worth $1.80 billion as concerns over economic growth in the U.S., IT firms' biggest market, hit demand.
"Policy uncertainty due to U.S. tariffs is likely to hurt growth in the information technology sector in fiscal year 2026," said analysts led by Ashwin Mehta of Ambit Capital.
"Lower U.S. GDP growth, softness in UK and European Union growth could hurt the street hopes of margin improvement over FY2025-28," Mehta said.
($1 = 84.6000 Indian rupees)
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