Out of the five major sectors, FIIs have invested Rs. 1 lakh crore but investments were withdrawn

MUMBAI: In the first half of the current year, foreign institutional investors (FIIs) have pulled out investments worth over Rs 1 lakh crore from five key sectors, construction, IT, finance, oil and gas and FMCG.

Financial sector stocks have seen the biggest sell-off. As of June 15, foreign investors have sold shares worth Rs 53,435 crore in financials, Rs 13,958 crore in oil and gas, Rs 13,213 crore in IT, Rs 12,911 crore in FMCG and Rs 9,045 crore in construction companies.

However, certain sectors including capital goods, consumer services, telecom continue to be the favourite sectors of FIIs.

FIIs are selling these stocks due to valuation concerns. The total shareholding of FIIs has also seen a decline due to the selling. An analyst said that issues such as the budget to be presented by the new government, the interest rate situation in the US and the presidential election in the US will determine the direction of FII operations in the last six months of the current calendar year.

Foreign investor inflows are expected to increase as government policies in India become clear after the budget. FIIs are excited about India's economy and corporate earnings, but high valuations prevented them from buying in the post-election rally.