In July, the inflow of funds into Indian stock funds slowed down, while small and mid-cap stocks remained hot.

Despite the adverse global factors such as soaring oil prices disrupting the market, investors continue to position themselves in small- and mid-cap themed products, although the inflow of funds into Indian equity funds saw a decline in July. Data from the Association of Mutual Funds in India shows that the net inflow into equity funds in July was 247 billion rupees, compared to a net inflow of 289 billion rupees in June. The sustained influx of funds coincides with the overall recovery of the Indian stock market in the previous month. Driven by a significant rebound in the previously pressured software export sector, coupled with substantial foreign capital inflow against the backdrop of sell-offs in surrounding markets such as South Korea and Taiwan, the benchmark index Nifty rose by 2.2% in July. Data indicates that among actively managed products, small-cap funds attracted the most capital, amounting to 77.7 billion rupees, while mid-cap funds attracted 61.9 billion rupees.