Domestic mutual funds have remained sellers in the five months to May, quite unlike foreign institutional investors (FIIs), which have been big buyers.
While mutual funds liquidated stocks worth Rs 700 crore between January and May this year, FIIs have continued to shop for Indian equities, the tab at Rs 17,267 crore, a 73 per cent rise over the amount they invested in the same period last year.
Mutual funds seemed to be quite bullish on the market last year, putting in Rs 13,811 crore in the first five months. This year, however, despite having seen a fairly strong increase in their corpuses — approximately Rs 7,000 crore between January and April — their appetite for stocks has shrunk.
Interestingly, FII inflows into the Indian market — which now has a market capitalisation of Rs 1 trillion—are strong despite the fact that Asian funds have been pulling out money from India.
Against an inflow of $1.6 billion into India from dedicated Asian equity funds between January and May 2006, there has been an outflow of $1.2 billion this year, according to EPFR Global.
Read more in The Business Standard article.
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