Fund managers of domestic mutual funds in October bought into select stocks that have been laggards in recent years. Bank stocks saw the biggest churn during the month with fund houses selling large lenders and buying their smaller peers.
For instance, large mutual funds bought
, , Bank of India, and Karur Vysya Bank, while selling , and HDFC.
The bet on bank stocks is that the pick-up in the credit cycle is expected to benefit smaller lenders, which have cleaned up their books and posted healthy profits in the September quarter. Fund managers also purchased shares of select companies in pharma, IT, defence, cement and hospitality because of cheaper valuations.
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