Domestic fund managers have been caught on the wrong foot, with their investment in the country's biggest engineering firm, Larsen and Toubro (L&T), and recent Sensex entrant Adani Ports. In the past fortnight, the stock has declined 13 per cent, compared with a 6.4 per cent decline in the Sensex.
Mutual funds (MFs) pumped in Rs 744 crore into L&T, making it the most-bought stock in December. Another stock where they have got their bets wrong is Adani Ports. The ninth most-bought stock by MFs has declined 16.3 per cent this month. On the positive side, barring these two, all other 10 most-bought stocks have outperformed the benchmark indices in the ongoing correction.
Among the top buys, HDFC Bank, newly listed firm Alkem Lab and Sun Pharma are down less than four per cent and Reliance Industries is up six per cent. Maruti Suzuki and NTPC were the most-sold stocks by MFs - both have fallen in line with the markets. At a time when, foreign investors have pressed the sell button, MFs continued with their stock investments, providing a counterbalance to the market.
Equity MFs, which have seen net inflows for the twentieth straight month in December, have been an influential investor on Dalal Street since 2014.