A man dressed as a businessman holds a briefcase covered in U.S. dollar notes. (Photographer: Simon Dawson/Bloomberg)

What Foreign Investors Bought And Sold In January

Foreign investors turned net sellers in India’s equity market in January after infusing funds for two consecutive months ahead of the interim Budget and the upcoming general election.

Overseas investors pulled out $600 million from the Indian equity market last month after infusing $854 million and $442 million in November and December, respectively.

Most of the selling was in the banking sector as foreign portfolio investors pulled out $492 million from bank stocks last month, NSDL data showed. This marks the seventh straight month of FPI outflow for the sector. The outflow was the highest compared with other sectors.

The capital goods sector witnessed the second-highest foreign fund outflows in January. Foreign portfolio investors pulled out $232 million, the highest since October last year.

The banking and the capital goods sector were followed by the metals and mining sector and automobiles and auto components sector, where overseas investors pulled out $135 million and $131 million, respectively.

On the flip side, the oil and gas sector received the highest foreign funds compared to other sectors in the equity market in January, followed by the pharmaceuticals and biotechnology sector, and the media sector, that received $124 million and $95 million, respectively.

While the data doesn’t specify which shares foreign investors bought, it’s interesting to note that the best performing oil and gas stock was Reliance Industries Ltd. It gained nearly 9.5 percent last month after its third-quarter earnings beat estimates even as relatively softer crude prices kept refining margin lower.

Although the company is classified under oil and gas sector as per BSE, a quarter of its revenue now is generated from its digital services, organised retail and other sectors.

The S&P BSE Oil and Gas Index fell 14.9 percent between Feb. 1, 2018—the Budget day—and Dec. 31. That compares with 0.45 percent advance in the country’s benchmark S&P BSE Sensex.

In January, Brent crude rallied nearly 12 percent during the first 15 days as Saudi Arabia reaffirmed its decision to head off a supply glut and the progress in trade talks by the U.S. and China. The rally, however, eased during the rest of the month as the Asian benchmark gained 2 percent. Brent crude had fallen nearly 37 percent in the preceding three months.