FPIs continue to dump financials, IT, FMCG shares in May. What lies ahead?

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₹22,000 crore in the month of May so far.The total selling by FPIs in the domestic equities since the beginning of 2024 amounted to over ₹19,000 crore so far, as per data available on National Securities Depository Ltd (NSDL).Meanwhile, the highest FPI outflows was seen in the financial services stocks worth ₹9,687 crore during the first fortnight of May 2024 (May 1 to May 15). This was after FPIs selling of ₹12,550 crore in the sector during April 15 - April 30.

Overall, FPIs dumped financial services stocks worth around ₹55,000 crore in 2024 so far, the NSDL data showed.Also Read: FPI outflows driven by skewed selling in banks, domestic cyclicals see robust inflowsOverseas investors also continued to sell heavily Information Technology (IT) sector shares during the first fifteen days of May. They sold IT sector stocks worth ₹5,574 crore during the period.

Earlier, they had offloaded IT sector shares to the tune of ₹9,573 crore in the month of April.The FMCG sector also continued to witness FPIs outflows at ₹1,158 crore in the first fortnight of May after outflows worth ₹7,914 crore last month.Analysts believe the heavy FPI selling in the financial sector was purely led by profit-booking and should not be seen as the story has ended.Also Read: FPIs remain assertive sellers in Indian equities as net outflow swells to ₹22,046 crore: What's fueling the sell-off?“Large investors are likely to be taking out profits after the recent rally in the share prices along with the sectoral rotation. The FPI selling should not be viewed as the end of the story as the fundamentals of the financial sector remain strong.