Mutual Fund industry invests Rs1,230cr in stocks since lockdown; FPIs reverse trend

Data given on SEBI shows, mutual funds made a net investment to the tune of Rs1,230cr in stocks.

Jun 01, 2020 09:06 IST India Infoline News Service

Equity Funds
Since the lockdown period, the Indian stock market has witnessed major corrections in valuation as bearish sentiments took toll due to rapid rising of Coronavirus pandemic in the country. The scenario is still gloomy. However, since March 25 till date, the mutual fund industry continued to have an appetite for the stock market.

Data given on SEBI shows, mutual funds made a net investment to the tune of Rs1,230cr in stocks since the lockdown was imposed on March 24 with effect from the next day, in order to fight to Covid-19.

The latest data further reveals that MFs invested a whopping Rs6,363cr during the last week of March 2020, however, they became net sellers on the stock market in April month by removing Rs7,965cr. Going forward, in May, the MFs reversed the April trend by investing Rs2,832cr.

Amit Jain, co-founder and CEO at Ashika Wealth Advisors told PTI, that mutual funds are not investing big amounts inequities as they are waiting for a good entry point. He believes will come within two months.

Further, Jain reportedly added, "MFs are keeping high liquidity for any possible redemptions by corporate house as post lockdown, the 44-player industry will face a lot of redemption pressure as corporates will withdraw a lot of money.

Overall, in March 2020, the industry invested more than Rs30,000cr, reportedly on attractive valuations as many stocks hit their 52-weeks lows.

On the other hand, the foreign investors made sellings of whopping Rs61,973cr in equities during March, followed by a net outflow of Rs6,883cr in April as fears mounted further due to Covid-19 which is expected to bring worst recession and severe economic damages. However, in May, the investors became net buyers with an inflow of Rs14,500cr.

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