Overseas investors remained net buyers across sectors in the second half of August, marking a second consecutive fortnight of inflows. Ten sectors recorded FPI inflows between August 16 and August 31, according to data from the National Securities Depository (NSDL).
Consumer Services: Foreign buying stays strong
Consumer Services attracted the highest inflows during the fortnight, with Rs 5,019 crore flowing into the sector. This took the sector’s total inflows for August to Rs 8,417 crore. The buying follows a strong July, when the sector recorded inflows of Rs 10,191 crore. Cumulative inflows over the last three months have now reached Rs 19,787 crore.
SBI Securities attributed the sustained interest to changing consumer spending patterns. “Higher disposable income is driving a major shift toward aspirational spending, boosting high-end fashion, luxury cosmetics, and premium organized retail,” the brokerage said in a report.
It added that consumer preference has shifted strongly toward leisure travel, upscale dining and hospitality, helping sustain sector growth despite broader economic cycles.
Financial Services: FIIs rebuild exposure
Financial Services followed closely, attracting over Rs 4,000 crore from FIIs during the fortnight. In the rolling two-month period from June to August, the sector received total inflows of Rs 16,570 crore.
SBI Securities said the return of foreign buying suggests that selling pressure on the sector has eased, with investors gradually rebuilding their exposure. The brokerage noted that Financial Services had recorded Rs 12,303 crore of outflows between March and May.The Financials index has been consolidating within the 25,671–27,127 range for the past two and a half months. A decisive breakout on either side of this range could provide the next directional cue for the index.
September has historically been a strong month for Financial Services, with the index ending higher in 12 of the last 20 years and delivering an average gain of 3.03%. Kotak Bank is the stock exhibiting a positive price action structure, says SBI Securities.
Healthcare: Inflows remain firm
Healthcare attracted Rs 3,021 crore during the second half of August. Over the rolling two-month period, the sector received Rs 12,076 crore of inflows. According to SBI Securities, stocks exhibiting a positive price action structure include Divis Lab, Glenmark, Ipca Lab, Laurus Lab, PPL Pharma and Zydus Life.
Telecom: FPI selling continues
Telecom remained under pressure, with FPIs pulling out Rs 4,983 crore from the sector in August 2026. The selling trend has persisted since January, with FPIs offloading Rs 29,513 crore from the sector so far this year.
The sector continues to face pressure from the heavy investments required for pan-India 5G infrastructure and spectrum renewals, which are weighing on near-term free cash flows. At the same time, actual 5G revenue generation through ARPU growth is scaling much slower than projected.
Unresolved legacy issues, particularly ongoing disputes over Adjusted Gross Revenue (AGR) dues and statutory payout timelines, also remain an overhang because of the potential for sudden legal and financial liabilities for telecom operators.
Telecom’s domestic-revenue-heavy business model also leaves the sector exposed to dollar-denominated import costs, including equipment, putting pressure on net profit margins compared with export-driven sectors such as IT and Pharma.
Stocks exhibiting a weak price action structure include Bharti Airtel, Bharti Hexacom, ITI, Indus Tower, Railtel and Route Mobile.
Power: FPI interest remains weak
Power continued to see consistent FPI outflows, with investors pulling out Rs 2,641 crore from the sector in August 2026. This follows significant outflows of Rs 9,956 crore over the previous three months.
State Power Distribution Companies (DISCOMs) are facing intense cash flow constraints and rising debt. Failure in tariff realisation and delays in subsidy payouts are directly limiting the capital expenditure needed for essential grid maintenance and modernisation.
The sector is also facing higher costs, with high import duties and global supply chain disruptions increasing the cost of critical components such as solar modules, wind turbines and high-voltage transmission lines.
Unpredictable weather shifts, including prolonged dry spells and irregular monsoons, have added another layer of volatility. These conditions have created spikes in peak power demand while simultaneously disrupting hydro and wind generation, forcing utilities to purchase high-priced emergency power from the short-term spot market.
Stocks exhibiting a weak price action structure include Adani Ensol, CESC, KPI Green, NTPC Green, NTPC, PTC India, Powergrid, Tata Power and Torrent Power.
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of The Economic Times)
