Why mutual funds may fuel IT, banking shares in current stock market?
Nifty, Sensex and Bank Nifty are still trading around record highs. In such a situation when stock market is witnessing participatory rally for long, mutual fund managers find it difficult to find stocks that may yield in sync with majority of indices are stocks also soar to record high. In fact, they outperform indices generating alpha returns.
According to stock market experts, today mutual fund houses are coming across same challenge and for them finding a stock available at doscounted price is little tricky. In such a situation, mutual funds are expected to move towards IT and private bank shares as they are still available at discounted prices and they have enough room to move upside in near term. However, they maintained that it would be large-cap stocks from the above mentioned segments that would be prefered by mutual fund managers.
On why mutual funds may lift IT and banking stocks, Prashanth Tapse, Senior Vice President — Research at Mehta Equities said, "Mid-cap and flexi-cap funds allow fund managers to move money from small-cap, mid-cap and large-cap stock when there is volatility in the market. Fund managers move money from one segment to another on the basis of market trend. In current bull trend, frontline indices are still near record high despite sharp sell off in mid-cap and small-cap stocks.
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