FPIs Rotate Into Metals As Global Prices Rise, Dump FMCG, Financials, IT

Foreign portfolio investors (FPIs) dumped FMCG, financial services, and IT stocks from Indian equity markets, and increased their exposure in metals, capital goods and consumer durables in the first half of January 2026. During the fortnight from January 1-15, 2026, FPIs offloaded a total of Rs 19,025.46 crore from domestic equities, according to data from National Securities Depository (NSDL).

The foreign selling, however, was comfortably absorbed by domestic institutional investors (DIIs). During the same fortnight, DIIs infused Rs 30,141.40 crore in domestic equities, more than offsetting the foreign outflows and cushioning the impact on the market.

FPIs Stack Up Metals Amid Rising Global Prices

According to NSDL data, FPIs bought metal stocks worth Rs 2,689 crore between January 1 and January 15, extending their buying spree for the third consecutive fortnight. During the fortnight ended December 31 and December 15, 2025, FPIs acquired Rs 2,177 crore and Rs 807 crore worth of metal stocks, respectively.

In the capital goods sector, FPI inflows was recorded at Rs 326 crore, after outflows of Rs 1,348 crore and Rs 1,218 crore were witnessed in the previous two fortnights.

Consumer durables sector saw FPI inflows for the fourth consecutive fortnight. According to latest NSDL FPI fortnightly data, foreign investors shored up Rs 322 worth of stocks.

During the period, the Nifty Metal index climbed 4.42 per cent, buoyed by strong gains in global base metals, particularly copper, tin, nickel and aluminium. Concerns over disruptions in key mining regions and rising demand from artificial intelligence (AI)-led data centres and infrastructure, and the ongoing energy transition, including electric vehicles and renewable energy projects have led to a supply-demand mismatch, thereby, supporting metal prices.

Rising silver prices also gave a boost to Hindustan Zinc, a major constituent of the metal index. While the company primarily produces zinc, silver is extracted as a by-product during operations. As the only listed Indian company with significant silver production, Hindustan Zinc has become a proxy for investors looking to benefit from rising silver prices.

Further, supportive global factors, such as expectations of rate cuts by the US Federal Reserve later in the year, and geopolitical tensions pushed demand for safe haven assets, supporting metal prices.

FPI Outflows Weigh On FMCG, Financials And IT Stocks

On the other hand, the FMCG sector saw sell-offs of Rs 6,128 crore by FPIs, followed by outflows of Rs 3,190 crore and Rs 2,075 crore from the from financial services and IT sector, respectively.

The sustained selling was mirrored in sectoral performance. The Nifty FMCG index fell a sharp 5.80 per cent during the fortnight, while the Nifty Financial Services index remained largely subdued, slipping close to half a per cent. The Nifty IT index also slipped, declining 0.16 per cent over the same period.

Why FPIs Are Selling Indian Stocks

The recent selling by FPIs has come at a time when geopolitical developments have turned more negative, weighing heavily on investor sentiment.

Markets were unsettled by a string of adverse developments, including the capture of Venezuelan President Nicolas Maduro by the US, the ongoing protests in Iran, and US President Donald Trump’s threat of possible intervention. Rising tensions between the US and Europe, where both sides are close to a tariff dispute over the Greenland issue, have added to the uncertainty.

Adding to the cautious mood, there has been no positive progress on trade talks between India and the US, which has further weighed on foreign investors’ sentiment and led FPIs to cut their exposure to Indian equities.

The selling by foreign portfolio investors has also hurt the rupee, making it weaker against the dollar and adding more pressure to the stock market. When FPIs sell Indian shares, they don’t keep the money in rupees. They convert it into dollars to take the funds out of the country. This leads to higher demand for dollars and excess supply of rupees in the currency market, which naturally pushes the rupee lower.