Shrinking inflows and surging outflows on account of profit-booking has curtailed mutual fund (MF) investments in equities since April. The total investments made by equity MFs during the first three months of 2023-24 stands at just Rs 2,980 crore, compared with an average monthly investment of Rs 14,500 crore in 2022-23, reveals data from the Securities and Exchange Board of India. "We are seeing signs of moderation in non-systematic investment plan (SIP) contribution, which has impacted domestic fund inflows in recent months to some extent," says Kunal Vora, head-India equity research, BNP Paribas.
'As China's reopening euphoria fizzled out on the back of some disappointing economic data, we saw inflows coming back to India with full force in the past 3-4 months.'
The deluge of offerings in the primary market, a muted results season and increasing talks of a Fed taper may quicken the pace of overseas investors selling Indian equities in the near term. The next few weeks may see a dozen companies tap the market for initial public offerings and raise about Rs 30,000 crore. These include the likes of Zomato, Glenmark Life Sciences, Utkarsh Small Finance Bank and Seven Islands Shipping.
Switzerland-based bank Credit Suisse said on Tuesday it expects the Bombay Stock Exchange's 30-stock barometer Sensex to touch the 22,000 mark in 12 months.
'There is a weak link between the economy and the stock market.'
Market participants are hoping for a few tweaks on the taxation front which will encourage consumers and businesses to spend.
There is polarisation among sectors with IT and healthcare receiving the lion's share of FPI money in the past two quarters.
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