Mumbai: Overseas investors sold Indian equities worth ₹45,360 crore across 17 sectors between January 16 and 31, according to data from NSDL. All 17 sectors, barring utilities, had witnessed selling in the first-half of January.Financial Services continued to endure the worst of the unrelenting foreign selling with these investors pulling ₹12,745 crore from the sector in this period, after selling a similar amount in the first half of the month, taking the total selling in January to almost ₹25,000. In 2024, foreign investors offloaded financial shares worth ₹58,280 crore. "The valuations in the financial services sector are reasonable but given that overseas investors have heavy holdings in the sector, the pace of selloff is more aggressive in this sector," said U R Bhat, co-founder, Alphaniti.In January, foreign investors sold shares worth ₹77,800 crore - the second highest selling in a month after October 2024. In 2024, global investors pulled out ₹1.20 lakh crore from Indian equities. 117996897"One of the major factors driving foreign investors' outflows is the rupee depreciation and with the strengthening of the US dollar and all emerging markets are under pressure currency weakness eats away the returns," said Sriram Velayudhan, Senior Vice President, IIFL Capital.Velayudhan said that it remains difficult to predict when the risk off stance will change. "If the rupee stabilises then it may be an inflection point with respect to the foreign sell off," he said.The rupee weakened to a reocrd low of 87.57 against the US dollar on Thursday. Bhat said that if the rupee stabilises and if the RBI believes inflation is under control, then the sentiment might improve but the larger concern is the volatility due to global uncertainty that is leading to flight of capital to safer assets such as in the US. Overseas investors also sold a total of over ₹4,000 crore in consumer services, Information Technology (IT) and Fast-Moving Consumer Goods (FMCG) sectors in the last 15 days of January.“The consumption booster in the budget could lead to some foreign inflows in consumption-oriented sectors like auto, consumer staples and consumer discretionary,” said Sriram. Velayudhan said that the depreciating rupee is also a tailwind for IT and hence can attract some foreign inflows. Bhat said that while there is expectation of foreign flows trickling into consumption-based sectors, the valuations are not cheap, and this could be a hurdle. Automobiles and auto components and capital goods witnessed foreign outflows worth Rs 3,899 crore and Rs 3,077 crore while healthcare and consumer durables saw selling worth over Rs 2,500 crore each. Foreign investors offloaded shares worth over `1,000 crore in the services, construction materials, construction and power sectors in the second half of January. If foreign investors remain risk averse, then further selling is likely across all emerging markets including India. “The allocation to India is a macro call and based on the global uncertainty with Trump at the helm in the US and a weak rupee, there are no signs of an immediate change in the stance of foreign investors,” said Bhat. Overseas investors purchased shares worth `2,991 crore across six sectors in the last 15 days of January.