FPIs stage strong comeback in financials with record fortnightly inflows in 2026

Mumbai: Foreign investors returned to financials in the second half of June, buying shares worth ₹14,634 crore after pulling out ₹11,263 crore in the first part of the month, boosted by inflows linked to global equity index rebalancing and value purchases.

This is their highest fortnightly purchase in financials in 2026 and the first since the second half of February.The renewed appetite for financials helped overseas investors turn net buyers of Indian equities worth more than ₹14,000 crore during June 16-30, reversing net sales of ₹63,450 crore in the first half of the month, according to NSDL data."FIIs turned net buyers in banks and financials after three consecutive months of record outflows.

Part of these inflows can be attributed to FTSE June '26 review and the rest to some active buying," said Sriram Velayudhan, senior vice-president at IIFL Capital Services, in a note.Financial stocks have seen the highest outflows in the past year as their dominant presence in India's stock market made them most vulnerable to foreign institutions' risk-off sentiment towards India.

With the West Asia conflict showing signs of ending in mid-June, overseas investors' selling in Indian equities has eased, with flows trickling into select pockets like banks and financials.132227992"The financial services sector makes up nearly 40% of the index, and, naturally, that would get large flows since it is a large and liquid sector with growth potential while being mispriced," said Vikas Gupta, CEO at OmniScience Capital.

"The financial services sector is likely to remain the favourite of long-term investors, including FPIs."Gupta said the focus is on financial services and infrastructure, which have clear growth visibility in the near to medium term and are significantly undervalued.Apart from financials, FPIs remained net buyers in construction, consumer services, services, consumer durables, realty and healthcare, among others, with purchases ranging between ₹1,400 crore and ₹3,400 crore.On the other hand, they sold shares worth between ₹1,300 crore and ₹4,300 crore in the automobile and auto components, capital goods, oil, gas & consumable fuels, power, and metals & mining sectors.

They continued to pull out of IT stocks, too, but the pace of the selling subsided in the second half of June. ...