The markets saw big reversal this month and bounced from the low of 8929 witnessed on June 13 to end at 10609.Renewed buying interest later in the month helped the market to curb the early losses and Sensex that plummeted massive 13.69% last month ended at 10609 up 2.02%.Overall the markets were extremely volatile and oscillated between positive and negative territory. Stocks however exhibited divergent trends and most of the midcap & smallcap stocks registered declines compared to the largecap stocks. The performance of sector indices has been mixed. BSE Oil& Gas index gained the most 4.09% while BSE Metal which lost 19.44% last month shed 2.47%. Among the other sectoral indices BSE FMCG and BSE IT posted impressive gains of 3.18% and 2.76% respectively. BSE CD was the biggest loser down 10.31%.

FII’s which pulled out massive Rs 7354 crore last month provided some respite and ended the month with net investments of Rs 479 crore. However MFs that had made net investment of Rs 7573 crore in last month turned sellers and sold equities worth Rs 1976 crore during the month of June.

Recent turbulence in the equity market had its impact on mutual fund NAVs. Out of the 152 diversified equity schemes considered only one scheme managed to outperform Sensex and Nifty. Diversified Equity Funds on an average lost 5.64%. FMCG Funds and Auto Funds preserved the downside better and lost 3.6% and 4.3% respectively. However Banking Funds and Pharma Funds were the biggest loser with negative returns of 11.26% and 9.31% respectively.

The total assets under the management of mutual fund industry for the month of June have declined by 3.78% from Rs.276342 crore to Rs 265872 crore. Standard Chartered Mutual Fund reported the highest increase in the corpus in absolute terms by Rs 1027 crore. LIC Mutual Fund witnessed the highest increase in the corpus in percentage terms by 12.41% from Rs 6722 crore to Rs 7566 crore. Birla Mutual Fund was the biggest loser in absolute terms by Rs 2379 crore and BOB Mutual Fund in percentage terms by 29%.

Top 5 AMCs w.r.t Assets under Management as on June 30, 2006

Alike broader market scenario all the schemes in ELSS category posted negative returns. The category lost more than the average Equity Diversified Funds for the considered month. Franklin India Index Tax Fund lost least in the category down 1.9% followed by BOB ELSS 96 down 2.44%.

Balanced Funds

Monthly Income Plans, hybrid funds having marginal equity exposure were also fazed by the negative sentiments and the category lost 0.42%.Twelve out of the 42 funds in the category posted positive returns. ING Vysya MIP Plan A was in top gear with absolute returns of 0.43%. BOB MIP Fund was the second best performer with returns of 0.37%.

Income Funds

The yield on the benchmark 7.59 per cent GOI 2016 rose to a new four year high to end at 8.12% up 47 basis point. The sentiments turned jittery after on 08th June’06, RBI hiked the reverse repo and repo rates by 25bps with in hours of the ECB raising its rates. Earlier, in its monetary policy review on April 19th, RBI left the rates unchanged against the widespread expectations of a rate hike. The sustained rise in yields dampened the sentiments and bond markets remained cautious on expectations that Reserve bank could raise interest rates further in coming month.

In the Income Fund category, Grindlays SSIF-MTP Plan A was the best performer posting impressive returns of 0.66% vis-à-vis category average returns of 0.56%. ABN Amro Flexi Debt Fund was the next topper with average returns of 0.56%.

Liquid Funds

Call rates remained range bound and ended the month at 5.75-5.85% compared to 5.5-5.6% a month earlier. The liquidity situation remained comfortable and RBI continued to absorb the money through reverse repo auction.

In the Liquid Fund Category Prudential ICICI Sweep Plan-Cash Option from Prudential ICICI Mutual Fund was the top performer giving absolute returns of 0.545%.LIC MF Liquid Fund at second position followed it with average returns of 0.542 %. While the category returned 0.468%.