Note: Figures as on January 31, 2008 Source: Value Research Online
Mutual fund houses have net sold Rs 533 crore in the first 13 days of this month compared with a net purchase of Rs 7,702 crore in January.
Mutual funds maintain cash to fund redemptions, if any, or to deploy it in the market. But most equity schemes saw inflows in January and fund managers say that they are still seeing inflows albeit on a smaller scale.
The Sensex has tanked by nearly 4 per cent or 700 points since the beginning of February. Funds have been selling shares to raise their cash levels in anticipation that markets may fall further and stocks would be available at mouth watering valuations.
Consider this: In the month of February, domestic institutional investors (mutual funds, insurance companies and banks) have bought equities worth Rs 1591.15 crore vis-a-vis the foreign institutional investors who have sold as much as Rs 3,561 crore, indicated data from the Bombay Stock Exchange website.
Insurance companies have been big buyers in the stock market, according to sources in the broking industry. But mutual funds have been selling.
Some funds such as HSBC Equity, JM Financial Services, Taurus Discovery Stock, Reliance Growth and Reliance Equity maintained cash up to 17 per cent of their portfolio.
