Tax outgo fears keep funds off CPs

Mutual funds refrained from any purchases On Monday as they preferred to remain cautious because of corporate advance tax outflow, dealers said.

Three-month commercial papers (CPs) were quoted at 13-14 per cent and three-month CDs at 7.20-7.30 per cent, both unchanged from Friday.

“Mutual funds preferred to remain cautious on their investments because of advance tax outflow,” said a dealer at a mutual fund.

Though dealers do not expect much redemption pressure from banks and companies, fund houses are still wary on investing. “A few fund houses invested in non-convertible debentures (NCDs) with a daily put-call option,” said a dealer at a mutual fund.