Indian Equity Fund Inflows Moderate to 247 Billion Rupees

Net inflows into Indian equity funds moderated in July, totaling 247 billion rupees ($2.6 billion), down from 289.7 billion rupees in June. The Association of Mutual Funds in India reported that while overall investment eased, interest remained strong in smaller companies, with small-cap and mid-cap strategies attracting 77.7 billion rupees and 61.9 billion rupees respectively.

This investment activity coincided with a 2.2% gain in the benchmark Nifty index. The rally was primarily driven by software exporters and foreign capital as investors moved funds out of markets in South Korea and Taiwan. Domestic investors provided further stability, contributing 319.6 billion rupees through monthly recurring plans to cushion against foreign selling.

Market performance diverged by segment through July. The Nifty Smallcap 100 and Nifty Midcap 100 indexes recorded their fourth consecutive monthly rally. In contrast, the Nifty 50 remained approximately 6% below its peak.