Mutual fund houses were net sellers in February. However, they were bullish on some select stocks in the month. Market heavyweights such as HDFC, Reliance Industries (RIL), Larsen and Toubro (L&T) and Infosys were their favourites during the month.
The mutual fund industry, which comprises 35 fund houses, were especially bullish on HDFC. A total of 11.43 lakh shares were bought of the housing finance company for Rs 160.35 crore. This was followed by RIL (Rs 124.05 crore), L&T (Rs 114.30 crore) and Infosys (Rs 64.83 crore).
In purchases, maximum buying was seen in the construction sector (Rs 130.20 crore), followed by companies with diversified businesses (Rs 125.48 crore), technology (Rs 102.1 crore), healthcare (Rs 82.12 crore) and energy (Rs 56.09 crore).
Fund managers said that the fund houses were buying construction sector stocks because the scrips, which had taken a beating in the recent past, turned attractive of late.
The outlook for the cement sector also turned positive. The impact of the fiscal stimulus packages, announced in the last few months, could further boost the stocks, fund managers said.
However, the fund houses turned net sellers of Rs 1,495 crore worth of stocks during the month. The stocks that bore the brunt of the selling pressure were State Bank of India (SBI), Bhel, Maruti Suzuki, ICICI Bank and BPCL, according to Value Research, a New Delhi-based mutual fund research agency.
Over 40 lakh shares of SBI, the country’s largest bank, worth Rs 465.48 crore were sold during the month. Shares of Bhel and Maruti Suzuki worth Rs 151.04 crore and Rs 111.40 crore, respectively, were also sold.
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In sell-offs, the financial sector saw maximum selling – of Rs 499.52 crore, followed by engineering (Rs 198.24 crore), metals (Rs 148.54 crore), services (Rs 123.92 crore) and automobile (Rs 81.73 crore).
The financial sector, as expected, was hit the most because of the global financial turmoil.
There are expectations that the non-performing assets of banks are going to rise substantially. No wonder, among the top-ten stocks that were sold, three of them were bank scrips.
There was also some profit-booking in the FMCG stocks, which had performed rather well in the whole of last year.