Mutual Fund managers seem to be bullish on bank shares as they raised their allocation to the sector to an all time-high of over Rs 85,000 crore in July anticipating a rate cut by the Reserve Bank, said the media report.
In comparison, equity fund managers' deployment in banking stocks stood at Rs 55,086 crore in July 2014.
Industry experts said that fund managers raised their allocation to bank stocks expecting a rate cut by the Reserve Bank.They added that fund managers can't take a bearish call on banking stocks, given the high weightage attached to the index.
As per the data available with Securities and Exchange Board of India (Sebi), overall deployment of equity funds in bank stocks stood at Rs 85,329 crore in July compared with Rs 78,582 crore in the previous month.
The previous high was in May, when allocation of funds in banking shares was at Rs 79,215 crore.
Besides, exposure to bank stocks was at 20.88% against 20.54% in the preceding month.
The BSE bankex index inched up 2.46 per cent in July, while BSE Sensex witnessed a growth of 1.2 per cent.
Besides, IT was the second-most preferred sector with fund mangers after banks with an exposure of Rs 38,404 crore, followed by pharma (Rs 31,246 crore), auto (Rs 28,761 crore) and finance (Rs 24,953 crore).