An employee places U.S. one-hundred dollar currency banknotes into a money counting machine at a bank branch. (Photographer: Akos Stiller/Bloomberg)

What Foreign Investors Bought And Sold In September

Foreign portfolio investors turned net sellers in September after two months as Indian markets fell on fears of a liquidity crisis triggered by IL&FS defaults, rising crude and a weaker rupee.

Foreign investors net sold stocks worth nearly $1.5 billion (Rs 10,800 crore) for the month, according to National Securities Depository Ltd. data—$900 million of which was sold in the second half of the month.

But they acquired select stocks during the month. The investors bought metals and mining stocks worth $91 million and shares of pharmaceuticals and biotechnology companies worth $60 million in the second half of September. The investors were net sellers in metals and pharmaceutical sectors in the first half of the month but turned net buyers of non-banking finance companies in the second half of September.

India has seen foreign fund outflows of about Rs 83,000 crore this year, with equity markets contributing more than Rs 28,000 crore. That comes amid expectations of higher rates in the U.S., depreciation of the rupee against the dollar and rising global trade tensions. Higher oil prices and the impending crisis with the insolvent infrastructure lender IL&FS Ltd. has added to the selloff.

The S&P BSE Sensex fell 6.3 percent and Nifty 50 declined 6.4 percent in September. Nifty 50 lost Rs 10.5 lakh crore in market capitalisation during the month.

Among the sectors that were worst hit were banking—where foreign investors sold stocks close to half a billion in the second half of September. The investors sold banking stocks worth close to a billion during the month. This was followed by outflows in the automobiles and auto components and software and services sectors.