Mutual funds' allocation to the banking sector dropped to Rs78,582 crore in June, after hitting an all-time high in the preceding month, amid weakness in bank stocks.
In comparison, equity fund managers' deployment in banking stocks stood at Rs54,746 crore in June 2014. As per industry experts, fund managers cut their allocation last month to bank stocks on account of profit booking. They also said that fund managers cannot take a bearish call on banking stocks, given the high weightage attached to the index.
As per the data available from Sebi, overall deployment of equity funds in bank stocks stood at Rs78,582 crore in June as compared with Rs79,215 crore in the previous month.
Besides, exposure to banking stocks was at 20.54 per cent of equity AUM in June as against 20.94 per cent in the preceding month. The BSE bankex index fell 2.5 per cent in June, while the benchmark Sensex witnessed a decline of 0.17 per cent.