Market surge sees equity funds gain

Market surge sees equity funds gain

Investors had reason to cheer in September as domestic equity markets surged. During the month, the BSE Sensex breached the 17,000 point mark and posted a gain of 9.32%. On a year-to-date basis, the Sensex has risen by 77.5%. The BSE Mid-Cap Index (up 7.50%) and the BSE Small-Cap Index (up 8.48%) also closed in positive terrain.

Higher-than-expected advance tax payments by companies were seen as a sign of economic revival. Market sentiment was also aided by encouraging Index for Industrial Production numbers.

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The recent rise in equity markets can in no small measure be attributed to investments made by foreign institutional investors (FIIs). They have been net buyers for seven months in a row now. During the month, FIIs bought equities of around Rs18,344 crore. Conversely, domestic mutual funds were net sellers to the tune of Rs2,334 crore.

From a sectoral perspective, banking stocks fared well on prospects of higher earnings growth; the BSE Bankex rose by 18.11% over the month.

Metal stocks were aided by rising commodity prices; the BSE Metal Index appreciated by 14.49%. Robust sales numbers aided the cause of auto stocks; the BSE Auto Index appreciated by 13.37%.

In order to merit funds’ long-term performance, they have been ranked based on their one-year Morningstar risk-adjusted return for this review.

Graphics by Yogesh Kumar / Mint