Equity MFs turn net sellers; shares worth Rs 675 crore sold

Investment managers say it's nothing but a tactical sell call

India's equity fund managers have turned net sellers as India's key indices trade at all time highs.

The first eleven trading sessions this month (data is available till 19th Nov) witnessed net buying only on three days, while rest of the sessions saw fund managers selling their holdings. Put together, shares worth Rs 674 crore were net sold.

"This is nothing but a tactical sell call to partially book profits on some counters. The underlying current remains bullish and buy on dips strategy is being adopted," says equity head of a mid-sized fund house. He further added that the selling is quite marginal and one should not read too much into it.

Similar was the case in September of this year when in initial sessions, fund managers chose to sell only to buy in later part of the month.

Post the Modi-led government took centre-stage in May this year, equity funds have been on a continuous buying spree. During May-October period fund managers pumped in nearly Rs 25,600 crore - the highest in sector's history.

"Even if we are sellers (of equities) this month, it should be seen as an aberration. It's a mild and conscious sell call not resulting out of redemption pressure, as has been the case earlier. It's a slight trimming of exposure in some stocks which have run too much," explains chief investment officer (CIO) of one of the largest fund houses.

There are several stocks, irrespective of the sectors, trading at 30-40 multiples or more. We feel it's better to move out from them and look for other avenues. Sector as well as stock rotation is important to take advantage of a bull market, he added.

Stocks which witnessed selling are in sectors which include - pharmaceuticals, automobiles and few IT companies.

BSE's S&P Sensex has gained nearly 1.7% so far in November. It closed on Friday at an all time high of 28,334.63.

As on 31 October, the equity segment of the fund industry had assets worth Rs 2.97 lakh crore.