Foreign Investors Not Finished Selling: FMCG Takes the Lead in 2026
Foreign investors have been more selective in their buying habits, accumulating shares worth ₹3,406 crore across just three sectors during the first half of January 2026. Notably, the metals and mining sector attracted the most investment, totaling ₹2,689 crore.
FMCG Sector Faces Significant Outflows
The Fast Moving Consumer Goods (FMCG) sector has experienced the highest level of foreign selling in the initial 15 days of 2026, with shares worth ₹6,128 crore offloaded. This trend is a continuation from a challenging 2025, which witnessed outflows amounting to ₹35,000 crore in this sector, marking it as the second-highest withdrawal last year.
Key Insights:
– FMCG Sector Characteristics:
– The FMCG sector is traditionally value-driven, with stocks often commanding a Price to Earnings (PE) ratio exceeding 50 times.
– Pranay Aggarwal, Director and CEO of Stoxkart, comments that this valuation sensitivity has led foreign investors to reassess their commitments, resulting in substantial withdrawals.
Other sectors have also felt the impact, with financial services and information technology experiencing outflows of ₹3,190 crore and ₹2,075 crore, respectively, in the first half of January. Last year, foreign investors had offloaded shares totaling ₹14,903 crore and ₹74,698 crore in financial services and IT sectors, respectively.
Economic Context & Investor Sentiment
Bhavik Joshi, Business Head at INVasset PMS, observed that despite the sell-off, banking and financial services stocks have shown resilience, even as mid- and small-cap segments struggled in 2025. He notes, “Profit-taking by global investors in BFSI after last year’s strong performance is likely, but the fundamental outlook for the sector remains positive.”
Global investors are also shifting their focus away from IT stocks due to concerns about higher tariff threats that overshadow potential benefits from rupee depreciation.
Emerging Trends in Other Sectors
In contrast, the metals and mining sector has seen renewed interest, with foreign investors channeling funds into equities linked to this area. This shift is driven by recent outperformance in gold and silver, with prices rising by 5.1% and 3.1% respectively. Analysts suggest that geopolitical tensions might sustain this upward trend over the next six to twelve months.
Key Highlights:
– Metal & Mining Sector:
– Foreign investors allocated ₹2,689 crore, reflecting a strategic pivot toward metal-linked equities.
– Industrial metals such as copper and aluminum are gaining traction due to the absence of direct ETF options, making equities the primary investment route.
Conclusion: Watchful Eyes on FMCG and Market Dynamics
As we delve deeper into 2026, the FMCG sector continues to bear the brunt of foreign investment withdrawals, with investors showing caution amid high valuations. Despite this, sectors like metals and mining appear to gather momentum, suggesting a possible reallocation of foreign interests across different domains.
The landscape remains fluid, and ongoing monitoring will reveal how these trends evolve as economic factors continue to influence investor behavior and sector performance in 2026.