Domestic funds invest, FIIs sell

CHENNAI: With the markets on a weak wicket, fund houses continue to pour money into stocks. Equity mutual funds (MFs) have made net investments of about $1.9 billion since the stock markets plunged on August 24.
Fund houses have made net investments (higher purchase of shares than sales) of `4126.9 crore or about $625 million in the first eight trading sessions of September, data with market regulator SEBI showed.They ramped up share purchases after the markets plunged on August 24 on fears that the sharp slowdown in China would derail an already fragile global economic recovery .
Equity MFs net bought shares to the tune of ` 12359 crore or nearly $1.9 billion between August 24 and Sep tember 10 on the back of sustained inflows into schemes by investors.

In contrast, foreign institutional investors (FIIs) net sold shares totaling about $3 billion or `19,212 crore during the period, ET Intelligence data showed. FIIs net sold (higher sales than purchase) shares in all but one trading session between Au gust 27 and September 11.
Equity MFs have emerged as the biggest counter-ba lance to the sell-off by FIIs buying aggressively during market falls. They net bo ught shares worth `5,067.7 crore in just three trading sessions in the last week of August when the bench mark Sensex slumped near ly 4%.
There is a shift from phy sical assets (such as real es tate) to financial assets (such as equities), says Sankaran Naren, chief investment officer, ICICI Prudential MF. Indian investors were under-invested in equities and debt from 2007 to 2013.
The under-investments in financial assets would change in the next 4-5 years, he says. Inflows (into mutual funds schemes) are quite good. Domestic investors have been quite smart. Retail investors have put more money during the (market) fall, says Sunil Singhania, head, equities, Reliance Capital Asset Management.
Equity mutual funds have added over 5 lakh folios or investor accounts in August alone. Equity MFs folios increased by about 5.16 lakh to nearly 3.38 crore folios at the end of the month. The MF industry added about 6.55 lakh folios in August.
Net inflows in equity mutual funds (including equitylinked savings schemes or ELSS) came at `48222 crore for April-August, a 91.2% jump compared to the same period the previous year, data with the Association of Mutual Funds in India (AMFI) showed. Inflows into equity schemes stood at `9,156 crore during August alone, AMFI data showed.