In June 2026, Indian mutual funds emerged as net buyers in financial services, IT, and healthcare, offsetting heavy selling by foreign institutional investors. While FIIs offloaded billions in these sectors, domestic fund houses strategically accumulated shares of major companies, signaling a divergence in market sentiment. Both investor classes showed shared interest in the services and telecom industries.
The Indian stock market witnessed a notable shift in investment patterns during June 2026, as domestic mutual funds acted as a stabilizer against substantial outflows from foreign institutional investors (FIIs). Data from the Association of Mutual Funds in India (AMFI) and the National Securities Depository Ltd (NSDL) revealed that while foreign investors were net sellers across several core sectors, domestic mutual funds stepped up to absorb the supply.
Financial Services and IT Accumulation
The financial services sector, often a bellwether for market sentiment, recorded a sharp contrast in activity. FIIs divested shares valued at approximately ₹12,453 crore, whereas mutual funds emerged as net buyers with an investment of ₹9,296 crore. Within this space, fund managers showed a clear preference for companies like HDFC Bank, Bajaj Finance, Kotak Mahindra Bank, and several public sector lenders, including Canara Bank and Bank of India. Conversely, mutual funds reduced their holdings in major names such as ICICI Bank, State Bank of India, and Axis Bank, reflecting a portfolio reshuffle rather than a sector exit.
A similar trend unfolded in the IT sector, where foreign investors sold over ₹7,444 crore worth of shares. Mutual funds countered this by adding roughly ₹1,732 crore to their portfolios. Stocks attracting mutual fund interest included Infosys, HCL Technologies, and Tech Mahindra. In contrast, they trimmed their exposure to companies such as Wipro, Persistent Systems, and KPIT Technologies.
FMCG and Healthcare Shifts
The FMCG and healthcare sectors followed a comparable pattern. In FMCG, FIIs offloaded about ₹5,598 crore, while mutual funds invested ₹3,545 crore. Accumulation was observed in consumer staples like Hindustan Unilever, Britannia Industries, and Nestle India, while stakes were lowered in ITC and Colgate-Palmolive. In healthcare, mutual funds net-invested ₹5,139 crore, slightly outpacing the ₹4,976 crore sold by FIIs. Key purchases here were concentrated in Ajanta Pharma, Divi’s Laboratories, and Torrent Pharmaceuticals.
Shared Interest in Telecom and Services
Despite the broader divergence, both FIIs and domestic mutual funds found common ground in the services and telecom sectors. Mutual funds poured ₹5,351 crore into the services sector, with FIIs also adding ₹334 crore. A similar positive trend was seen in the telecom sector, where domestic funds invested ₹1,860 crore against ₹412 crore by foreign investors. This shared interest suggests that despite varying views on large-cap financials and IT, there is a unified optimism regarding the growth trajectory of service-oriented businesses.
Investors looking ahead should track whether these mutual fund flows continue to provide a floor for valuations in these sectors. The key monitorable will be the sustainability of these domestic inflows, particularly if global macroeconomic pressures continue to prompt FIIs to reallocate capital away from emerging markets.
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