Where is the money flowing? Top 10 stocks bought and sold by MFs in June

FPIs have bought Financial Services and Telecommunication over the last two fortnights

Mutual funds (MFs), major players in the Indian stock market, are constantly fine-tuning their investment strategies. This translates to adjustments in their holdings across various companies. While some companies witness increased interest from MFs, others might see a decrease.

A recent analysis by YES Securities reveals a shift in holdings for some prominent companies. Here are the top 10 stocks where MFs reportedly bought and sold their holdings:

Promoter buying/selling for the last 30 days

 

IT spearhead gains

Fertilizer and Rail stocks garner gains ahead of the Union Budget

"Indian Equity Benchmark performance has surpassed global indices over the past year. While mid-cap and small-cap stocks have struggled worldwide compared to large-cap stocks, Indian markets have stood out as an exception. This has led to increased valuation multiples across various sectors of Indian equities. In contrast, Brazil and China have faced significant difficulties, affecting multiple sectors," said Hitesh Jain, lead analyst at YES Securities.

 

India's stock market has seen a rise in its valuation, measured by a metric called PE ratio. This could be a cause for concern, as a high PE ratio suggests stocks are expensive. However, Jain argues this might not be a bad sign for India.

Two key points support this argument. Firstly, similar increases in PE ratio are happening in other major markets like the US and Europe. This suggests it's a global trend, not specific to India. Secondly, unlike other markets where the financial sector is driving the valuation increase, India's financial sector valuations have actually gone down. This means other sectors in India are experiencing strong growth, potentially justifying the overall market rise. 

Jain believes India's companies are expected to have even stronger earnings growth in the future compared to other markets. This promising outlook strengthens the case that India's current valuation might be reasonable.