Window of opportunity for mutual funds

Amid the rally in June buoyed by favourable monsoon and expectation of better corporate earnings, mutual funds booked profits in oil marketing companies like BPCL, HPCL and Indian Oil. Thèse stocks have almost doubled in the last couple of years.

Reliance, L&T and ICICI Bank saw some buying emerge from large-cap funds. Retail investors continued to invest in equity mutual funds mainly through the SIP route, with as much as Rs 3,200 crore coming in every month. Midcap stocks continued to see churn from fund houses after reviewing results for June quarter. Stocks with weak visibility of earnings over the next couple of quarters went out, while those where earnings prospects seem good came in.

This saw fund houses exit stocks like Astra Microwave, Dredging Corporation, Indian Bank, Castrol, Gulf Oil, Blue Star. Fresh purchases were made in stocks like Atul, NCC Ltd, Inox Leisure & India Cement. Prashant Mahesh takes a look.