Foreign investors buy ₹15,560 crore of Indian shares in early July
Foreign portfolio investors extended their buying streak into early July, signaling a potential bottom in the beaten-down IT sector and continued appetite for consumer services.
Foreign investors purchased a net ₹15,560 crore of Indian equities during the first half of July, extending a robust buying streak that began in the latter half of June. According to NSDL data, overseas funds had already injected over ₹14,000 crore into the market in the preceding two weeks. This sustained two-month accumulation provides a crucial layer of liquidity support for Indian equities at a time when global capital flows remain highly volatile and directionally uncertain.
The sectoral allocation of these foreign funds reveals a clear rotation toward domestic consumption and long-term industrial themes. Consumer services, a broad category encompassing e-commerce platforms and hotel chains, attracted the heaviest buying. Metals and mining secured the second-highest inflows, followed closely by healthcare.
This selective buying came at the direct expense of the industrial cycle and telecommunications sectors. Automobiles, auto components, and capital goods witnessed the most severe foreign withdrawals, while telecom also registered notable outflows. Across the 24 monitored sectors, the skew was decidedly positive, with 15 recording net inflows and just eight experiencing selling.
The shift in information technology is drawing particular attention from market strategists. The sector has endured months of relentless foreign selling amid global macroeconomic concerns. "The biggest highlight of this period is that after months of consistent selling in IT, FIIs have turned marginal buyers this fortnight, suggesting the sector may have bottomed out," said Apurva Sheth, head of research at Samco Securities. A sustained floor in IT valuations could prompt broader portfolio rebalancing by institutional investors.
Meanwhile, foreign interest in metals and mining signals confidence in India's infrastructure trajectory despite recent price weakness. "Metals and mining remain a long-term structural theme despite recent underperformance, making it an attractive buying opportunity for both FIIs and domestic investors," Sheth noted. The concurrent buying by both foreign and domestic institutions in this space typically indicates strong conviction in the underlying fundamentals, rather than short-term speculative trading.
