Investments by mutual funds (MFs) remained positive for five consecutive days till Sept. 1, coinciding with equity benchmarks reaching new highs on the back of bullish macroeconomic data and buoyant August car and two wheeler sales posted by companies.
The trend is likely to continue as manufacturing and service sectors posted exponential growth during August, as evidenced by PMI data.
Equity purchases by foreign institutional investors (FIIs) were also in positive territory for the week ended Sept. 2, according to data published by the National Stock Exchange.
MFs were net buyers of equities from Aug. 26 to Sept. 1, peaking to a high of Rs. 809 crore on Aug. 31, the day the BSE Sensex hit a new 52-week high. This was on the back of Rs. 701 crore worth of Indian stocks purchased by them on a net basis the previous day. However, on Sept. 1, they almost sold as much as they bought, resulting in new purchases of Rs. 107 crore.
The previous trading sessions of Aug. 26 and 29 saw MFs buying stocks worth Rs. 235 crore and Rs. 274 crore on a net basis.
While manufacturing PMI for August was at a 13-month high at 52.6, services sector grew at an even faster clip to 54.7, highest since January 2013, according to IHS Markit Nikkei India PMI.
"The service sector showed upbeat levels of performance in August. New business was the main driver of activity growth, even amid increased competition for new work," said Pollyanna De Lima, economist at IHS Markit and author of the report.