India's monthly fund investments hit record highs

Inflows into Indian equity mutual funds hit a five-month high of 383.07 billion rupees ($4 billion) in September, driven by record monthly investments despite a market selloff and sustained foreign selling.

Equity funds have drawn net inflows for a record 67 straight months, with domestic investments increasingly cushioning Indian stocks against global volatility.

Overall inflows rose 31% from August, data from the Association of Mutual Funds in India showed on Monday.

Mid-and small-cap funds attracted record ⁠inflows of 78.45 billion rupees and 90.39 billion rupees, up 12% and 13%, respectively.

Contributions through systematic investment plans (SIPs), popular among retail investors, rose 0.6% to a record 324.90 billion rupees ($3.39 billion), helping offset foreign portfolio outflows of $3.75 billion in September.

"Steady domestic flows, particularly through SIPs, signal resilient support from local institutions and retail investors despite rising inflationary pressures, higher crude prices and rising U.S. bond yields," said Venkat Chalasani, chief executive of AMFI.

"The SIP money ⁠flow that we are noticing in the Indian market, that's a structural change and I do not think it will slow down anytime soon," said Prasenjit Paul, fund manager at ⁠129 Wealth and research analyst at Paul Asset.

"Whenever FIIs return, the market is poised for a structural bull run given the underlying DII support."

Investors also ⁠continued to seek exposure to precious metals: gold ETF inflows surged 71% to 44.51 billion rupees, while silver ETFs attracted 19.74 billion rupees.