IT stocks lead FII outflows worth Rs 2,725 crore in late May. Banks, auto also among party poopers
Foreign Institutional Investor (FII) activity saw a significant slowdown in the latter half of May, largely driven by a notable pullback in key sectors. The Information Technology (
IT
) sector was particularly hit, leading the outflows as
FIIs
sold equities worth Rs 2,725 crore between May 16 and May 31. This was a sharp reversal from the Rs 289 crore in net buying seen in the first half of the month.
The financial services sector also contributed significantly to this slowdown. After being net buyers of Rs 4,728 crore in the first two weeks of May, FIIs became net sellers, offloading Rs 700 crore worth of shares in the second half. Similarly, the auto & auto components sector witnessed a substantial sell-off of Rs 1,509 crore in late May, a stark contrast to the Rs 1,610 crore in buying during the first half.
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These shifts in FII sentiment across these prominent sectors were major factors in the overall decline in foreign investments. A 46% drop in FII investments was seen between May 16 and May 31 at Rs 6,989 crore from Rs 12,874 crore recorded in the first half of the month.
The oil & gas sectors, whose clout in
Nifty
is only inferior to financials and IT in terms of weight, witnessed a sharp drop in the buying activity to Rs 390 between May 16 and May 31 from Rs 2,130 crore in the first half.
Healthcare and realty sectors repeated their selling trends of the first half in the second half as well. In the healthcare sector, FII selling intensified, accelerating to Rs 2,008 crore in the second half of May, compared to Rs 606 crore in the first half. The realty sector also saw continued FII divestment, with Rs 822 crore worth of shares sold in the second half, slightly less than the Rs 842 crore sold in the first half of the month.
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FII selling in consumer durables also increased from Rs 622 crore in May 1-15 to Rs 1,112 crore in May 16-31.
Turnaround sectors
FMCG, which is the fifth biggest sector in terms of its weight in Nifty (6.75%) witnessed a turnaround in fortunes with FII buying of Rs 1,872 crore in second half versus Rs 1,057 crore worth sell-off in the first half.
In the construction sector, FII bought shares worth Rs 457 crore in second half while remaining net-sellers in first half at Rs 190 crore. In the construction materials space FII buying increased from Rs 155 crore in the first half to Rs 420 crore in the second half.
Capital Goods saw an enhanced vigour with FII choosing to raise their bets to Rs 3,094 crore in second half from Rs 2,233 crore in the first half.
May witnessed the second successive month of FII buying at Rs 19,860 crore after a modest Rs 4,223 crore purchase in April. So far in 2025, FIIs have been net sellers at Rs 1,01,290 crore.
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