Millennium Post

Mutual funds have withdrawn Rs 13,721 crore from stocks in 2013

Domestic mutual funds sold shares throughout 2013 barring May and August. MFs offloaded shares worth Rs 4,018 crore in October while worth Rs 2,801 crore in September. On the other hand, net inflows by foreign institutional investors were more than Rs 8,000 crore into stocks last month, according to data available with market regulator Sebi.

That took total investments by foreign investors in equities to over Rs 97,000 crore in 2013 so far.
Mutual fund is an investment vehicle that is made up of a pool of funds collected from many investors for the purpose of investing in securities such as stocks, bonds, money market instruments and similar assets.

Debt MFs were net buyers in the debt market in November and bought debts schemes to the tune of Rs 41,623 crore. With equity market remaining volatile in 2013, domestic funds have increased their focus on debt market to benefit from higher interest rates and have invested Rs 4.3 lakh crore in the debt market in the first 11 months of the year.

The market participants believe that fund houses have been shifting focus from equity to debt scheme because of volatility in the secondary market and better returns by the latter as compared to bank fixed deposits.

Another reason for investing in debt schemes could be lower risk compared to equity funds.

Rupee snaps 3-day loss ‘on RBI intervention’, up 39p to 61.73 per $

Mumbai: The rupee gained for the first time in four days on Monday, appreciating 39 paise to 61.73 against the dollar, amid indications that the Reserve Bank of India (RBI) had stepped in to support the local currency after a spate of weak economic data. The rupee also rose on fresh dollar sales as the US currency weakened overseas before the Federal Reserve meeting. The local currency recovered from early losses even as government data showed wholesale price index (WPI) inflation climbed to a 14-month high of 7.52 per cent in November, strengthening chances of a rate hike by the Reserve Bank at its policy review meeting on Wednesday.

Fresh capital outflows and weak local equities failed to negatively affect the rupee, a forex dealer said.

At the interbank foreign exchange market, the rupee opened lower at 62.15 a dollar from Friday's close of 62.12 and declined further to 62.24 amid hesitancy in local stocks and dollar demand from importers.

It recovered as exporters and some banks sold dollars to settle at the day's high of 61.73, a rise of 39 paise or 0.63 per cent.

‘Rupee was seen giving a muted reaction to the poor WPI data released today (Monday) as RBI was seen selling dollars in the market. The central bank is seen coming to the rescue as economic indicators are trying to put pressure on the rupee,’ said Abhishek Goenka, CEO of India Forex Advisors.

Retail inflation soared to 11.24 per cent last month, while factory output contracted 1.8 per cent in October.

The dollar index was down 0.21 per cent against a basket of six major global rivals ahead of the Federal Reserve meeting starting Tuesday. The Fed may indicate when it will tapering its stimulus programme.

Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said, ‘After depreciating for three consecutive days, the spot rupee appreciated by over half a per cent today (Monday),  taking cues mainly from the dollar index which is trading weak for the second consecutive day as investors continue to  guess when the Fed will begin slow ing the pace of its unprecedented bond buys, which have been understood to weigh on the dollar.’

HIgh WPI inflation rate shaves 56 points off Sensex

Mumbai: Remaining weak for the fifth session in a row, the BSE benchmark S&P Sensex on Monday dipped by 56 points to end at 20,659.52 in an otherwise lacklustre trade ahead of RBI’s monetary policy on coming Wednesday. Rise in headline inflation to 14-month high, fresh capital outflows also put pressure on the local bourses, a broker said.

Shares from refinery, auto and FMCG segments attracted profit-booking while from IT, consumer durable and pharma gained on buying support.
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