With the domestic market off to a turbulent start in the second half of 2024-25 (FY25), the trajectory of the market is expected to be determined by domestic institutional inflows, particularly from mutual funds (MFs).
In recent years, MFs have been a major support for the market, more than offsetting sharp bouts of foreign portfolio investor (FPI) selloffs. Benchmark indices have declined nearly 5 per cent in the past week amid a pullout of over ₹30,000 crore by global funds. Experts suggest that the decline could have been worse without domestic liquidity support.
“The consistent increase in systematic investment plan flows and the spread of these flows across the capitalisation curve, as well as across sectors and themes, has enabled domestic MFs to act as effective shock absorbers in the stock market. This cushions the market from the vagaries of FPI flows, providing a high degree of resilience,” said Sunil Subramaniam, a market expert and former senior MF executive.
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TRUTH BE TOLD
