Financial services

REITs form guns on financial services stocks in September, data shows

More than a third of foreign portfolio investor (FPI) inflows into equity markets in the first two weeks of September went to financial services stocks. They attracted flows worth Rs 5,335 crore, while fast moving consumer goods (FMCG) stocks got Rs 1,997 crore, data compiled by showed.

During the first half of the current month, REITs bought shares worth Rs 12,763 crore. As of September 15, 2022, the REITs allocation to the financial services sector has increased to 31.94%, from 31.69% at the end of August 2022.

In August, REITs invested Rs 12,799 crore in financial stocks while in July they bought shares worth Rs 1,014 crore. However, the inflows came after large outflows worth Rs 85,43,300 crore in the first six months of 2022.

Analysts believe that an improvement in bank credit growth and a peak in the bad debt cycle are the reasons for the interest of REITs in financial stocks. They also said that FMCG stocks are considered the most defensive bets in the event of global financial turmoil. Even during the Lehman crisis, the fall in FMCG stocks was minimal compared to others.

On the other side, IT stocks saw a peak sell-off by REITs over the past fortnight at around Rs 3,998 crore, weighing on its performance. Several brokerages downgraded IT stocks amid global uncertainty and margin pressures. After IT, property stocks saw a maximum outflow, however, the selling quantum was relatively lower at Rs 574 crore.

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