BFSI stocks again led FPI selling activity in first half of April 2026

FPI SECTORAL SELLING AGAIN DRIVEN BY BFSI

The month of March had been intimidating. FPIs had sold $5.70 billion in the first half of the month and $7.00 billion in the second half. After the massive sell-off, some respite was expected in April, but that was not to be. The first fortnight of April again saw FPI selling to the tune of $5.15 billion; and once again, the selling was all about BFSI. FPIs are not just cautious about the geopolitical risk, but also worry that the combination of high inflation and low growth could limit the investment case for India. For now, that may not happen, as nominal GDP growth is expected to bounce in FY27. After $18 billion of FPI selling in 45 days, it is hard to predict outcomes, but H2-April may hold the key.

Data Source: NSDL

FPI TRIGGERS: WHY $18 BILLION SELL-OFF IN 45 DAYS

• The trigger for the FPI sell-off came from the geopolitical risk in the Middle East, as the war has been only showing signs of intensifying with each passing day.

• There are concerns that higher crude prices, gas shortfall, supply chain constraints (as seen in core sector) could negatively impact inflation and growth in the India story.

• A reality check. India’s weight in MSCI EM index cut from 21% in Sep-24 to sub-14% in Feb-26. India now ranks behind China, Taiwan, and Korea in EM weightage.

• The big reason for FPIs shifting funds to Taiwan, Korea, and China is that India does not have sufficient companies representing AI-led innovation. That is the gap.

SECTORAL FPI FLOWS IN APRIL 2026 (FIRST FORTNIGHT)

While FPIs were net sellers of $5.15 billion in H1-April, the FPI AUC in equities bounced to $730 billion, and overall AUC to $805 billion; thanks to a rally in stocks in April 2026.

• Let us start with the BFSI sector that saw net selling of $2.05 billion in first fortnight of April 2026. It was the low-hanging fruit for FPIs, and also the most vulnerable.

• Consumer Services and FMCG saw combined selling of $890 million. The crisis is expected to constrict demand and consumer spending amid rising uncertainty.

• Healthcare and Auto saw combined FPI selling of $877 million. The trade constraints are expected to hit the supply chains of these 2 sectors the hardest.

• IT and Telecom saw combined FPI selling of $409 million. They are less vulnerable, but could be hit by global spending; especially as Telcos have data centre plans.

• Realty and Construction saw combined FPI selling of $341 million. Housing demand is under stress, and government is going slow on infrastructure spending.

• Oil companies also saw selling, but what was missing was any trace of buying in the market by FPIs. Buying was scattered in power stocks, without any clear signals.

With the rupee strengthening from ₹95.22/$ to ₹92.60/$, it remains to be seen how the FPIs absorb and interpret the news flows in the second half of April 2026.