Rocky start for equities in H2FY25 puts focus on mutual fund flows

Charting course to calm: With record equity inflows of Rs 2.8 trillion in FY25, they provide the ballast that steadies the ship amid choppy FPI exits

With the domestic market off to a turbulent start in the second half of the financial year (2024-25/FY25), the trajectory of the market is expected to be determined by domestic institutional inflows, particularly from mutual funds (MFs).

In recent years, MFs have been a major support for the market, more than offsetting sharp bouts of foreign portfolio investor (FPI) selloffs. Benchmark indices have declined nearly 5 per cent in the past week amid a pullout of over Rs 30,000 crore by global funds. Experts suggest that the decline could have been worse without domestic liquidity support.

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