Inflows into equity mutual funds dropped to a four-month low of Rs 6,108 crore in April as the broader market witnessed extreme volatility on concerns over the coronavirus pandemic.

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Overall, the mutual fund industry witnessed net inflows of Rs 45,999 crore across all segments, data by the Association of Mutual Funds in India showed on Friday. In comparison, an outflow of Rs 2.13 lakh crore was seen in March.

Fears of deepening global slowdown due to the COVID-19 outbreak and subsequent lockdowns have spooked the markets globally, including in India.

"India has recovered some of its lost performance in the global crash of February-March through the rally over the last one month. However, with smaller earnings cuts, India looks even cheaper relative to EMs from a month ago," a report by Emkay stated.

As per the report, during April 2020, major buying by mutual funds was seen in the pharma space. It added that auto also continued to see buying while FMCG saw selling for the second-straight month in April.

Among sectoral preferences, IT continues to remain the largest underweight, while pharma is now the biggest overweight for MFs.

As per experts, pharma is now the rising star with the overall focus shifting towards drugs amid the coronavirus pandemic.

Meanwhile, among stocks, large-cap funds saw buying in Reliance, HDFC Bank and ICICI Bank. However, Selling was seen in Bajaj Finserve, Tech Mahindra and SBI.

On the other hand, mid-cap funds bought Aarti Industries, PI Industries and Tata Consumer Products, while they sold Aditya Birla Fashion, GSK Healthcare and Thermax.

First Published:May 19, 2020 1:40 PM IST