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A crash to watch : LiveMint Editorial

According to data issued by the Amfi, net flows into equity funds crashed 95% in June to under ₹240.6 crore, while debt funds had a similar tumble, falling to ₹2,862 crore


Indian stock markets have rebounded from their lows, but mutual funds saw a massive drop in inflows last month. According to data issued on Wednesday by the Association of Mutual Funds in India, net flows into equity funds crashed 95% in June to under ₹240.6 crore, while debt funds had a similar tumble, falling to ₹2,862 crore. A relief, though, was that the money went into systematic investment plans (SIPs), which fell only a marginal 2.4% to ₹7,927.1 crore last month. SIPs make up a large chunk of India’s retail outlay on shares.

Overall, market participants seem to be in a purchase mode. The BSE Sensex rose 7.7% in June. Share prices have been on an incline, a rally that largely seems to be led by foreign portfolio inflows. With cheap money available in the West, it was inevitable that some of it would go into Indian equities. Usually, retail investors join such rallies, even if they look fragile. But this time, many of them seem either short of money or were unwilling to put more of their savings into relatively risky assets. Some have been liquidating their mutual funds to make up for income shortfalls. Others may simply have chosen to book profits.


Courtesy - Livemint

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