Will Foreign Investors Drive A Market Surge? Sunil Subramanian On Foreign Investor Trends.

Foreign investors (FIIs) are making a comeback in the Indian stock market after heavy selling in October and November, where they sold ₹1.14 lakh crore and ₹45,974 crore worth of shares respectively. However, December saw a reversal with FIIs buying shares worth ₹11,933 crore. Amid this FII resurgence, which sectors and stocks stand to benefit the most? Market veteran Sunil Subramanian shares his insights, highlighting Banking and IT as his top sectoral picks over a 1-2 year horizon. Here’s what he had to say: 1. IT Sector: Indian IT companies have transitioned from basic outsourcing to high-value consulting, making them attractive to foreign investors. With a strong dollar, IT firms gain an edge as their rupee earnings grow. Additionally, US corporate growth and stable earnings provide further support for the IT sector. Sunil Subramanian expects significant FII inflows into IT due to the sector's transparency and growth potential. 2. Banking and Financial Services (BFSI): The banking sector stands to benefit from FII passive inflows as it constitutes a significant portion of the large-cap index. The recent CRR rate cut has provided additional liquidity for lending, and the RBI Governor’s emphasis on the banking sector’s health reinforces optimism. With capex cycles picking up and consumer discretionary growth accelerating, both public and private sector banks are poised for growth. Additionally, BFSI includes wealth management, stock exchanges, broking firms, and insurance companies, which will benefit from rising per capita incomes and increased savings and investments. Watch this video to understand why these sectors are poised for a strong performance as FIIs return to Indian markets.