FPIs buy the most in fortnight since April 2025, IT still a sell

In a notable shift, foreign portfolio investors (FPIs) made their largest investments in Indian equities since April 2025, injecting ₹33,487 crore across 15 sectors in the first half of February. The capital goods sector attracted the most attention, receiving ₹8,032 crore, a significant increase from ₹2,761 crore in January, partly fueled by the government's ₹4,470 crore stake sale in BHEL. Analysts suggest that the recent US-India trade deal framework could have encouraged these foreign inflows into capital goods, textiles, and gems and jewellery. Financial services also saw a resurgence with ₹6,175 crore in investments after substantial selling in January, driven by strong third-quarter earnings from banks. In contrast, the IT sector faced a sharp downturn, with foreign investors selling over ₹10,000 crore in the first fortnight of February. This trend is attributed to concerns over AI-related disruptions affecting software services, leading to a nearly 15% decline in the Nifty IT index this year. While some analysts view the sell-off as an overreaction, the current foreign investment landscape indicates a meaningful shift from technology services to sectors linked to the real economy.