FPIs back on D-Street: Foreign portfolio investors pour in over Rs 33,000 crore, but why is IT sector missing from their shopping list? – The Times of India

Foreign portfolio investors as soon as once more turned in direction of Dalal Avenue to buy Indian equities, spending in Rs 33,487 crore throughout 15 sectors, in the primary half of February. The bulk of the inflows went into capital items, monetary providers and oil & fuel shares, marking the strongest fortnightly shopping for seen because the second half of April 2025. Capital items shares attracted the best inflows, drawing Rs 8,032 crore between February 1 and 15, in contrast with Rs 2,761 crore in January. The authorities’s Rs 4,470 crore stake sale in BHEL partly supported the sector’s momentum. “The capital items sector has underperformed the market, and there was nothing damaging in the funds on the sector which might have prompted world investors to reallocate funds,” stated Siddarth Bhamre, head of Analysis, Asit C Mehta Intermediates instructed ET. In response to Rajesh Singhla, CEO & fund supervisor at Alpha AIF, the US-India commerce deal framework introduced in the primary week of February additionally lifted sentiment in segments similar to capital items, textiles, gems and jewelry, serving to draw international cash. Monetary providers witnessed a turnaround, receiving Rs 6,175 crore in the primary fortnight of February after dealing with outflows of Rs 8,592 crore in January. Singhla stated sturdy third-quarter earnings from banks and monetary corporations might have supported investor curiosity, though he famous that valuations in the sector stay unappealing. Foreign investors additionally purchased Rs 4,678 crore value of oil & fuel shares throughout the interval.Why is IT nonetheless failing to draw? Regardless of the broader shopping for, abroad investors continued to exit some sectors. They offered Rs 13,812 crore throughout eight sectors in the primary half of February, with info know-how bearing the brunt. IT alone accounted for greater than Rs 10,000 crore of the outflows. The sector has been underneath sustained stress in 2025, with practically Rs 75,000 crore value of shares offloaded to date, the best amongst all sectors, amid considerations that AI-led disruption might have an effect on the outlook for software program providers exporters. “Fears of AI making the sector much less labour-intensive might spark additional promoting,” stated Bhamre. “Abroad investors have shifted allocation from providers to pockets in the true economic system in this fortnight.” Market efficiency displays the pattern. The Nifty IT index has declined practically 15% to date this 12 months, in contrast with a 2.6% drop in the benchmark Nifty. Singhla, nonetheless, steered the promote-off might have been extreme. “The international promoting in IT shares was on account of fears of the earnings trending decrease because the menace of disruptions on account of AI loomed massive, but most of the promoting was sentimental, and the promote-off was an overreaction,” he stated.