Indian Market Trends: Steady SIP Contributions Amid FPI Outflows and Sectoral Shifts

In February 2024, despite ongoing market corrections, Indian retail investors continued to show confidence in the country's growth story, with mutual fund SIP contributions maintaining steady levels. Meanwhile, foreign investors pulled out significant funds, influenced by global economic factors, while sector-specific trends highlighted varying inflows and outflows across industries.

Mutual Fund Contributions:

• Monthly Mutual Fund SIP contribution amount continues to remain around 26000 mark for 3rd month in a row despite Indian equities correcting for the fifth consecutive month.
• The cumulative SIP inflows has already exceeded previous FY24 figure by more than 32.2% despite market correction highlights retail investors confidence in India growth story.

FPI Inflows and Outflows in February 2024:

• Foreign investors have pulled out ₹ 34,574 crore from the Indian equity markets in February pushing total outflows to ₹ 1.12 lakh crore in 2025 amid global trade tensions and earnings concerns.
• The recent market sell-off has been influenced by rising US bond yields, a strengthening US dollar, and global economic uncertainties, leading to a shift in investor focus towards US assets.

Overall Market Trend

• Financials, FMCG, IT, and healthcare sectors faced major sell-offs, while telecom and capital goods saw inflows.

Sector with FII Inflows

• Telecom attracted ₹5,661 crore in inflows, marking the second consecutive month of FII buying, driven by 5G expansion and ARPU growth.

Sectors with FII Outflows

• Automobile witnessed an outflow of ₹3,279 crore due to profit-booking amid slowing rural demand and rising input costs.
• Healthcare saw ₹2,996 crore in FII outflows, impacted by US FDA scrutiny on Indian pharma firms.
• FMCG lost ₹2,568 crore in FII investments due to weak rural consumption and lower volume growth.
• Financials remained among the hardest-hit sectors, with FIIs reducing holdings in banks and NBFCs amid global liquidity concerns.
• IT experienced repositioning by FIIs as global demand weakened and tech spending slowed in the US and Europe.