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Like in the past few months, investment from mutual fund (MF) houses has acted as a much-needed cushion against sell-off from foreign investors. In the past fortnight, while foreign institutional investors (FIIs) pulled out nearly Rs 8,000 crore (excluding inflows seen on account of the Sun Pharma share sale) from Indian stocks, domestic fund houses were buyers of Rs 9,500 crore, helping mitigate the market correction.
On previous occasions also (October and December 2014), MFs have been strong buyers during sell-offs from foreign investors. This is an encouraging sign as the Indian markets are said to be overly dependent on FII flows. MFs have been able to provide a counterbalance on account of net investor inflows of more than Rs 70,000 crore into equity schemes in the past one year.
