In March 2023, Indian mutual funds increased their investments in equities to a record high level, according to data from the Securities and Exchange Board of India (SEBI). This was driven by the fact that the benchmark indices had dropped to their long-term averages, making equities more attractive to investors.
In March 2023, local mutual funds invested a total of ₹20,764 crore in equities through the secondary market. This is the highest level in nine months and represents a significant increase in investment activity compared to previous months.
Domestic investors have been actively buying equities for seven consecutive months. The Nifty 50 index, which tracks the performance of the top 50 companies listed on the National Stock Exchange of India, has dropped to a valuation of 17.3 times its one-year forward earnings, making equities a more attractive investment option.
The rise in investments by local mutual funds in equities is a positive sign for the Indian stock market, as it indicates that investors have confidence in the long-term prospects of the Indian economy. It also suggests that there is strong demand for equities, which could drive stock prices higher in the coming months.
Overall, the increased investment activity by local mutual funds in equities is a positive development for the Indian stock market and the economy as a whole. It suggests that investors are optimistic about the future and are willing to put their money into the stock market to reap potential rewards.
Mahil