Just when green shoots were emerging, the worst fear has come true. With lockdown coming back, the recovery is stalled once again. Today, we are also going to discuss what mutual funds are buying and the dilemma that the investors of HDFC Bank are facing.
Many states in India have once again re-imposed the lockdown. Though it remains restricted to select zones, it will certainly stall the progress and diminish the prospects of the economic recovery.
As the situation stands currently, India cannot afford another lockdown. Further restrictions could delay the impending urban recovery and undermine the advantages of the healthy monsoon season.
Mutual funds: The churn is on
New equity inflows for June dropped to 4-year low. Notably, the contribution of SIPs also slipped below Rs 8,000 crore mark for the first time since Nov’18.
Amid these testing times, fund managers are seen increasing their exposure in Oil & Gas, NBFC and Banking (Private & PSU) space.
The flow moderated in Healthcare, Utilities, Technology, Consumer, Capital Goods, Cement and Chemical sectors.
The Oil & Gas sector climbed back to the third position in the allocation of mutual funds after moderating in the previous month. NBFCs’ weight also increased after declining for 3 consecutive months. Healthcare’s weight moderated after rising for 5 consecutive months.
What's cooking at HDFC Bank?
HDFC Bank's probe into alleged improper lending practices in its vehicle financing arm created panic. The bank tried to maintain a calm posture and called it a routine exercise. However, the street remained spooked.
Such signs ahead of the CEO succession are not good news for the bank. One could only pray that Aditya Puri's departure doesn't open up the fresh can of worms.