sector saw inflows worth $244 million in April, while for the two months combined the figure stood at $516 million. The realty
sector witnessed $213 million buying by FIIs
in April and $710 million during the March-April period.
In the past one month, however, both, the BSE FMCG and Realty
indices have underperformed the benchmark index.
A shift to the FMCG space suggests a more defensive approach by FIIs
towards domestic equities due to the second wave of the Covid pandemic.
"Last year, when the pandemic played out in a big way, the first sector to rally was FMCG. Since many names from the sector have corrected, the FIIs
are drawing inferences from experiences of the last pandemic and picking them," said G Chokkalingam, founder, Equinomics.
BSE FMCG index has lost nearly 3 per cent in the past one month as against a decline of 1.5 per cent in the BSE Sensex. Meanwhile, the BSE Realty
index has declined a whopping 7.6 per cent in the same period.
Source: NSDL, Edelweiss Alternative Research
As for the real estate sector, analysts believe the possibility of a strong growth outlook is what's making FIIs bullish.
"Due to the global stimulus, both monetary and fiscal, I am of the view that in the next two-three years, there will be a rally in the real estate space. The free money which is pumped into the system will inflate the asset prices. Since equity and commodity markets
are already inflated, and next in line would be realty," said Chokkalingham.
However, he suggested that one has to be very selective in picking stocks. Go for the plays that have a strong balance sheet, in terms of low debt, and a significant land bank, he said.
VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services believes that the historically low interest rate is also a big tailwind for the sector.
On the flip, side, the top three sectors which saw maximum outflow during April were Banking & Financial ($1.12 billion), Oil & Gas ($466 million) and Metals & Mining ($242 million), the report added.
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