Equity mutual funds witnessed net inflows for the fourth straight month in June but they plunged 40 per cent over the preceding month to Rs 5,988.17 crore as investors resorted to profit booking on the back of the recent stock market rally.

Equity mutual funds had witnessed a net inflow of Rs 10,083 crore in May, the highest infusion in 14 months.

“Consistent equity inflows indicate positive sentiment among investors as the economy is opening up and vaccination drives are going reasonably well. However, the decline on a month-on-month basis could be attributed to profit booking as well as pressure on household savings during recent lockdowns,” said Mohit Nigam, head, PMS-Hem Securities.

Investors continued to invest in pure equity schemes, resulting in positive net sales of almost Rs 6,000 crore. However, this is slightly lower than last month because of higher redemptions. “The trend surely is in favour of the Indian equities by domestic investors,” said Akhil Chaturvedi, associate director, head of sales & distribution at Motilal Oswal Asset Management Company.