In the first two weeks of April, Foreign Institutional Investors (FIIs) withdrew ₹19,152 crore (approximately $2 billion) from the Indian stock market, with financial stocks experiencing the largest sell-off. This followed a staggering ₹60,655 crore exodus in March. Despite the FII pullout, the Nifty Bank index surged 14% this month, highlighting a stark contrast between foreign and domestic investor sentiment. Financials bore the brunt of the selling, with over ₹48,000 crore in total offloaded, while sectors like consumer services, healthcare, and automobiles also faced significant outflows. Domestic brokerage Prabhudas Lilladher warned of potential challenges for the banking system, citing issues like hardening deposit rates and slumping credit card growth. Nevertheless, they remain optimistic about banks, noting a rebound in credit growth from 9% to 14.3%. Tata Mutual Fund anticipates a 15-20% earnings growth for banks in FY27, driven by improved credit conditions. However, the persistent FII selling could continue to weigh on bank stock performance.