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Last Updated : Mar 13, 2020 07:09 PM IST | Source: Moneycontrol.com

MFs go on shopping spree, eye banking and IT stocks

"Mutual funds were buying shares of select private bank shares, information technology, chemical and consumption stocks," said a broker.

 
 
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Mutual funds went ahead and added more to their cart after the stock market posted major losses this week.


"Mutual funds were buying shares of select private bank shares, information technology, chemical and consumption stocks," said a broker.


Another broker said that fund houses were buying shares of HDFC Bank, Kotak Mahindra Bank, Bata India and Relaxo.


When market reopened after circuit cooling period on March 13, Nifty staged a smart recovery from lows to close 433 points higher from previous close, retaking mount 10k, at 10,023. Sensex closed at 34,103, higher by 1,325 points from previous day's close.


"At the current levels, market valuations are very attractive and there is some sense of panic in the market due to the very rapid fall we have experienced in the indices in very short period of time," said George Heber Joseph, CEO & CIO, ITI MF.


He also said that in the past instances of virus epidemics, the impact on  markets has been short-lived.


"The other fear of the market - oil price fall - does not impact Indian economy negatively as India is a large net importer of oil. Thus, advantage of the opportunity and invest aggressively in the market," Joseph said.


Fund houses are expecting the market to hover around same levels for some more time.


Joseph feels that the Indian economy is close to the bottom of the economic cycle. Corporate profits to GDP are very low and at levels last seen in 2003.


"Many sectors are experiencing very low growth rates. We feel this weak growth phase is more cyclical than structural.  The structural reform measures (GST, RERA, Bankruptacy Law, Corporate Tax Cuts) are very positive for the economy," Joseph said.


The MF players and overall domestic institution investors(DIIs) seems to have found value buying in falling markets.


Beginning week of March 2 till March 12, 2020 DIIs we're net equity buyers of Rs 21,800 crores . This is in contrast to net outflow of Rs 24,300 crore by FIIs during this period.

Echoing this value buy, Nilesh Shetty of Quantum MF said: "We have used correction to buy into companies where we see value. If valuations remain attractive, we will continue to increase our equity holdings."



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First Published on Mar 13, 2020 07:04 pm
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