look news india
Mumbai: Domestic mutual funds have slowed down their buying in the stock market in July due to pre-budget caution, compared to the first six months of the current year.
According to data received, fund houses have made net purchases of Rs 2,757 crore so far in July as against the average monthly equity purchase of Rs 31,600 crore during January to June of the current year.
Fund houses are expected to decide their next course of action based on how the policy proposals announced in the first budget of Modi-3, to be presented tomorrow, said a chief investment officer of a fund house.
Domestic institutional investors remained cautious as the budget date approached.
Institutional investors also want to see whether the pace of economic reforms in the past period will be sustained over the next five years.
Since the BJP has not got a clear majority on its own in the current term as compared to the previous term, the view prevailing in the market is that it will be forced to move ahead by taking its allies into confidence.
Heavy buying by mutual funds has been a key factor in taking the market to new heights in the last three years.
The market is being supported by record inflows into mutual fund equity schemes. An analyst said mutual fund buying may have slowed down in the current month, but foreign institutional investors have invested over Rs 29,000 crore, the highest in any month this year.