FII Investments: Sector-Wise Inflows and Outflows in February 2026

Synopsis: FII investment in IT fell 16% to Rs. 4.49 lakh crore in early February 2026 amid AI-related concerns and heavy selling. Sectoral data show a clear rotation, with strong inflows into capital goods, financials, energy, and infrastructure segments.

The issue around Anthropic is mainly about the fast developments in artificial intelligence. As AI tools become more powerful and competitive, tech companies around the world are under pressure to upgrade their systems and invest more money in new technology.

This can affect the IT sector because companies may need to spend more to keep up with AI changes. This can reduce short-term profits and create uncertainty. Some IT firms might struggle if they don’t adapt quickly, while others that adopt AI smartly could benefit in the long run.

IT sector sees sharp FII pullback in early February

FII investment in the IT sector has fallen to Rs. 4.49 lakh crore as of Feb 1–15, marking a 16% decline from January-end levels. After peaking at close to Rs. 7 lakh crore, FII holdings have steadily trended downward, indicating sustained selling pressure in IT stocks. The decline also coincides with concerns around the Anthropic-related issue, which added uncertainty in the global tech space and may have weighed on investor sentiment toward IT stocks. Overall, this reflects cautious foreign investor positioning in the sector amid evolving global technology and AI-related developments.

The table below presents sector-wise FII (Foreign Institutional Investor) flows from 1–15 of Feb. It categorises the data into FII outflows and inflows across various sectors, showing how foreign investors shifted their allocation during these periods.

In the FII outflows section, the IT sector witnessed a sharp increase in selling during 1–15 Feb, with heavy outflows compared to modest activity in late January. FMCG and Healthcare also experienced consistent selling pressure, although the intensity varied. Telecommunication and Consumer Durables saw negative flows as well, indicating cautious sentiment in defensive and consumption-oriented sectors.

On the other hand, the FII inflows section highlights strong buying interest in certain sectors during early February. Capital Goods and Financial Services recorded substantial inflows. Oil & Gas and Power also attracted significant foreign investments in February, signalling renewed interest in energy and infrastructure-related sectors. 

Other sectors, such as Construction, Services, Consumer Services, Realty, Chemicals, Auto, and Construction Materials, have also seen inflows in particular sectors. Many of these sectors faced outflows in January but turned positive in early February, suggesting a rotation strategy by FIIs moving funds from sectors like IT and FMCG into capital-intensive and cyclical sectors.

Overall, the data indicate a sectoral rotation trend, where FIIs reduced exposure to traditionally strong sectors like IT and FMCG while increasing allocations toward infrastructure, energy, financials, and capital goods in early February. This shift may reflect changing macroeconomic expectations, valuation considerations, or global investment sentiment.

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