MFs favour HDFC Bank, SBI stocks

The rising stock market has seen renewed buying interest from mutual funds, but only in select stocks.

In March, mutual funds were net sellers in equities to the tune of Rs 270.60 crore and net buyers in debt of Rs 702.20 crore, as per the Securities and Exchange Board of India(Sebi) data.

However, select stocks such as HDFC Bank, State Bank of India, ITC, Larsen & Toubro and United Spirits saw sustained buying.

The fund houses were mainly bullish on heavyweight stocks such as HDFC Bank and bought 4.34 million shares worth Rs 402.29 crore, followed by the State Bank of India (Rs 175.59 crore), ITC (Rs 169.71 crore), Larsen & Toubro (Rs 166.52 crore), United Spirits(Rs 163.36 crore).

Fund managers said that banking stocks, which had taken a beating, were much sought after now. HDFC and SBI figured at the top in the sector.

ITC is an index stock, so some investors were overweight and some underweight on this stock. Mutual funds which were sitting on cash were running to deploy cash in this stock.

Financial Technologies was a good stock as it operates exchanges such as the Multi Commodity Exchange (MCX).

There was good buying in Tata Motors too due to the Nano launch.

Mutual funds were net sellers in some stocks such as HDFC,Bhel, Maruti Suzuki India, Reliance Industries,Punjab National Bank, ICICI Bank, Hero Honda, TCS, Amteck auto and Ranbaxy Laboratories, according to Value Research, a New Delhi-based mutual fund agency.

Around 2.7 million shares of HDFC have been sold at Rs 361.15 crore, 1.94 million shares and 2.5 million shares of Bhel and Maruti Suzuki respectively were sold. Around 1.28 million of RIL shares , 2.9 million shares of PNB, ICICI Bank (2.68 million worth Rs 88.71 crore), Hero Honda 5.99 lakh shares worth Rs 59.30 crore,TCS 11.62 lakh shares worth Rs 59.30 crore and Ranbaxy Laboratories 25.26 lakh shares worth Rs 41.35 crore were sold in the month of March.

Market experts believe that HDFC could post bad quarterly results and ICICI bank, investors are scared of bank liabilities and as far as Hero Honda is concerned it is one of the best performing stock and there has been a profit-booking at the higher level. TCS, there is expectation of weak numbers in the fourth quarter.

And Ranbaxy Laboratories, investors are scared of uncertainty in this stock, therefore, they are getting out of this stock added a fund manager of a mutual fund.