Mutual funds use correction to buy blue-chip stocks, shows data

Domestic mutual funds (MFs) scooped up bluechip stocks in December, taking advantage of price corrections seen in them.

The benchmark Nifty50 declined 3.5 per cent last month and four out of five top buys by equity MFs fell more than the benchmark. Domestic fund managers deployed Rs 2,410 crore, the most, in HDFC, followed by nearly Rs 1,900 crore investment in Reliance Industries, which had dropped close to 7 per cent last month. Maruti Suzuki and Kotak Mahindra Bank — which declined more than 6 per cent each — were among the top five buys.

Meanwhile, Axis Bank emerged as the top-selling share, with equity MFs pumping out Rs 1,330 crore from the stock. In November, the government had sold its residual 1.55 per cent stake in the private sector lender, which, analysts said, removed a key overhang on the stock.

Money managers dumped shares in the information technology and pharmaceutical space even as they saw a meaningful correction. HCL Technologies, Dr Reddy's Lab and Tech Mahindra were among the top-sells in December.