Mumbai: Mutual funds were mainly buyers in the equity market on Tuesday noting the fall in wholesale price index-based inflation for January and strong company earnings, dealers said.
They bought shares of ICICI Bank, Punjab National Bank, and State Bank of India after India's Wholesale Price Index-based inflation for January was in line with estimates at 6.55 percent, and lower than 7.47 percent in December.
Market participants are hoping the fall in inflation may prompt the Reserve Bank of India to soon start cutting key interest rates, and this view spiked investor interest in rate sensitive sectors.
Buying was seen in shares of automobile companies such as Tata Motors, and Hero MotoCorp, and in information technology major Infosys, said a dealer.
Today, Tata Motors reported a consolidated net profit of 34.06 billion rupees for Oct-Dec beating analyst estimates of 25.62 billion rupees.
Fund houses offloaded shares of Cipla, as the company posted poor Oct-Dec results post-market hours Monday. Cipla's net profit for the third quarter was 2.70 billion rupees, falling behind analyst estimates of 2.93 billion rupees.
On Monday, mutual funds net sold shares worth 2.61 million rupees, taking their net sale so far in February to 11.64 billion rupees.
Mutual funds bought three-month certificates of deposit of Indian Bank, and United Bank of India at 10.15 percent, and one-year CDs of Corporation Bank at 10.05 percent.
They also invested in three-month commercial papers of Housing Development Finance Corp at 10.47 percent.