Mutual fund investment in equity markets drop 58% to Rs4,300 cr in July
04 Aug 2015
Mutual fund inflows into the equity markets dropped nearly 58 per cent to Rs4,300 crore in July compared to the previous month, due mainly to subdued corporate earnings and higher valuation of stocks.
Against this, mutual fund investment in debt instruments saw a net inflow of nearly Rs31,000 crore last month.
Mutual funds invested a net Rs4,339 crore last month, compared to Rs10,325 pumped in June, data released by market regulator Securities and Exchange Board of India (Sebi) showed.
In April 2014, mutual funds were net sellers and pulled out Rs2,700 crore.
Market sees the current drop as a temporary phase, due mainly to subdued corporate earnings and the Greek financial crisis, and expects equities to be back in favour with fund managers soon.
Mutual funds have remained invested in equities for the 15th month in a row now. The funds have been witnessing net inflow in stock markets since May last year on account of expectation of reforms and favourable macroeconomic data. Since May 2014, they have made a net investment of more than Rs70,000 crore in Indian equities.
Mutual funds pool small investments collected from various sources to buy securities such as stocks, bonds, money market instruments and similar assets.
The Indian mutual fund industry currently manages funds to the tune of Rs6,85,000 crore.