Mutual funds withdraw Rs 2,100 crore from stocks in July

Continuing their selling spree in the stock market,domestic mutual funds have sold shares worth over Rs 2,100 crore in July

Continuing their selling spree in the stock market,domestic mutual funds have sold shares worth over Rs 2,100 crore in July,making it 13th consecutive month of net outflows. The funds offloaded shares worth about Rs 2,168.50 crore in the equity market during July,higher than Rs 296 crore outflow witnessed in the month of June,according to the latest data available with market regulator Sebi. With the latest sale of shares by MFs,the net withdrawal reached to Rs 15,042 crore since the beginning of the year. In comparison,the foreign institutional investors made a net outflow of more than Rs 6,000 crore from equities in June,almost half from Rs 11,027 crore pulled out in the preceding month. Also,MF investors pulled out Rs 23,740 crore in debt schemes after investing a staggering Rs 64,602 crore in the such schemes in June. Still,the debt market witnessed a net inflow of Rs 2.7 crore in the first seven-month period of 2013. 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. According to market participants,overall,fund houses have been shifting focus from equity to debt scheme because of volatility in the secondary market and latter offers better returns compared to bank fixed deposits. Another reason for investing in debt scheme could be lower-risk in it than equity funds. At the end of June,there were a total of 1,184 schemes under mutual funds,of which 749 schemes (66 per cent of the overall schemes) were debt oriented while 346 schemes (29 per cent of total schemes) were equity related.

Gold gaining ground as stocks,bonds lose some lustre: Experts

Gold prices are likely to rise sharply in the short-term as Reserve Banks recent liquidity tightening measures have made other investment options like stock and bonds less attractive,experts have said. Gold prices are already moving fast to the key level of Rs 30,000 per 10 grams ahead of the busy marriage and festival season. The rates in the national capital on Friday rose by Rs 450 to Rs 28,800 per 10 gms. Market experts also noted that global rates,which profoundly influence domestic prices,are on firming trend,too. The translational cost due to depreciation of rupee will also make the precious metal dearer,they added. To arrest steady fall in rupee,earlier this month the Reserve Bank of India under the liquidity adjustment facility had made MSF rate 300 basis points above the policy repo rate,resulting in bank rate raising to 10.25 per cent. RBI measures like a hike MSF (Marginal Standing Facility) had triggered a series of events impacting the bottom line of safe investors countrys core investment populace,experts said,adding that investors are likely to park their money in gold now,considered safer than stocks and bonds. Overnight,investors in safe havens lost 5-7 per cent across the board. In an already faltering economy,this move may have triggered an event that has been blamed for falling rupee our appetite for gold. The fallout of this action may push Indians to the only option they understand gobbling gold, said Samar Vijay,Director of InvestCare. The fall in the markets during the week has come about despite good gains in global markets,indicating the pre-dominance of domestic concerns,said Dipen Shah,Head of Private Client Group Research,Kotak Securities.