That's one explanation for the rather listless trading by funds so far in August. The other explanation could be that funds are adopting a wait-and-watch attitude.

Figures released by the Securities and Exchange Board of India (SEBI) has thrown up some pretty interesting facts as far as buying/selling by mutual funds is concerned.

After beginning on a positive note on August 1, 2000 with a (net) purchase of Rs 319.7 million and then selling Rs 260.0 million on August 2, fund managers seem to have gone into hibernation. There have been token sales and purchases since then.

A probable reason behind this rather lackluster trading could be the lack of a trend in the markets at present. With the markets going nowhere, buying and selling has been rather subdued. This is the case even with the foreign financial institutions (FIIs) who haven't been very active in August either.

Add to this the fact that funds haven't really witnessed any significant inflows in this month, and redemption pressure hasn't climbed in a big way either. So funds seem to have maintained status quo for the time being. But this could change even if one of the factors  markets, inflows or redemptions change dramatically.

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