India’s equity mutual fund inflows rise after 2-month lull on earnings, US trade deal

 Inflows into Indian equity mutual funds rose for the first time in three months in ​February, according to industry data on Tuesday, as stabilising earnings ‌growth and a trade deal with the U.S. helped lift sentiment. Inflows rose 8.1% month-on-month to 259.78 billion rupees ($2.82 billion), data from the Association of Mutual Funds ​in India showed. However, fewer trading sessions during the month resulted ​in inflows through systematic investment plans dropping to 298.45 ⁠billion rupees from 310.02 billion rupees in January. "A notable feature of ​the month was the sharp pickup in flows into the mid-cap ​and small-cap (mutual fund) categories," said Himanshu Srivastava of Morningstar Investment Research India. Investments in gold exchange-traded funds slid sharply to 52.55 billion rupees in February from ​240.4 billion rupees in January, when they surpassed equity mutual fund inflows ​for the first time. Last month, the benchmark BSE Sensex (.BSESN), opens new tab index dropped 1.2%, while ‌the ⁠Nifty 50 (.NSEI), opens new tab index dropped 0.6%. Broader small-caps (.NIFSMCP100), opens new tab rose 0.3%, while mid-caps (.NIFMDCP100), opens new tab rose 1.2%. Foreign investors turned net buyers in February after three months of outflows, purchasing shares worth 226.15 billion rupees. While offloading 169.49 billion rupees ​of IT stocks last ​month due ⁠to fears of an AI-led disruption, foreign investors invested in sectors such as capital goods, financials, metals, ​and energy. Improving earnings, despite a one-time hit from ​new labour ⁠codes, supported the buying last month. India struck a trade deal with the U.S. in early February, which brought down the tariff on Indian ⁠goods ​to 18% from 50% earlier, granting ​Washington limited access to its market for agricultural products ($1 = 91.9700 Indian rupees)