DIIs step in as markets wilt

As the markets plunged following a gloomy global economic outlook, domestic institutional investors (DIIs) stepped in and remained active buyers on a day that saw key indices post their biggest fall in over two years.
DIIs, which include insurance firms, mutual funds (MFs) and financial institutions, made net investments (higher purchase than sales) to the tune of Rs 743.4 crore on Thursday, BSE data shows.FIIs net sold equities worth Rs 1,305.5 crore during the day. Despite the active buying, which wasn’t enough to stop the fall, DIIs continue to remain net sellers for the month.
Equity MFs are also playing it safe because of the market volatility. After turning active buyers by making the highest monthly net investments for 2011 in August, equity MFs have net sold equities to the tune of about Rs. 773 crore so far in the month (till September 21).
"People are turning cautious," says Sankaran Naren, chief information officer, equities, ICICI Prudential MF. "Investors are nervous because of the uncertain economic environment," says Ramanathan K, CIO, ING MF.
Fund managers have become wary as macro-economic concerns and the global uncertainty have only increased, say industry officials. Interest rates are still going up and inflation continues to be high. And aversion to riskier assets such as equities would only grow among investors in such a situation, say industry officials.
"Since the market direction is not clear, investors are moving more towards assured (fixed) return platforms," says Jaideep Bhattacharya, group president and chief marketing officer, UTI MF. Investors would rather put their money in fixed deposits and fixed maturity plans than take risks with equities, say market watchers.
"We have to live with volatility for some more time. So, it is better to stagger investments," says A Balasubramaniam, CEO, Birla Sun Life MF. "Investors should buy in dips as equities are not necessarily riskier than they were a year ago," says ICICI’s Naren.
As the markets plunged following a gloomy global economic outlook, domestic institutional investors (DIIs) stepped in and remained active buyers on a day that saw key indices post their biggest fall in over two years.
DIIs, which include insurance firms, mutual funds (MFs) and financial institutions, made net investments (higher purchase than sales) to the tune of Rs 743.4 crore on Thursday, BSE data shows. FIIs net sold equities worth Rs 1,305.5 crore during the day. Despite the active buying, which wasn’t enough to stop the fall, DIIs continue to remain net sellers for the month.
Equity MFs are also playing it safe because of the market volatility. After turning active buyers by making the highest monthly net investments for 2011 in August, equity MFs have net sold equities to the tune of about Rs. 773 crore so far in the month (till September 21).
"People are turning cautious," says Sankaran Naren, chief information officer, equities, ICICI Prudential MF. "Investors are nervous because of the uncertain economic environment," says Ramanathan K, CIO, ING MF.
Fund managers have become wary as macro-economic concerns and the global uncertainty have only increased, say industry officials. Interest rates are still going up and inflation continues to be high.
And aversion to riskier assets such as equities would only grow among investors in such a situation, say industry officials.
"Since the market direction is not clear, investors are moving more towards assured (fixed) return platforms," says Jaideep Bhattacharya, group president and chief marketing officer, UTI MF. Investors would rather put their money in fixed deposits and fixed maturity plans than take risks with equities, say market watchers.
"We have to live with volatility for some more time. So, it is better to stagger investments," says A Balasubramaniam, CEO, Birla Sun Life MF. "Investors should buy in dips as equities are not necessarily riskier than they were a year ago," says ICICI’s Naren.