March 10 (Reuters) - Inflows into Indian equity mutual funds rose for the first time in three months in February, according to industry data on Tuesday, as stabilising earnings growth and a trade deal with the U.S. helped lift sentiment.
* Inflows rose 8.1% month-on-month to 259.78 billion rupees($2.82 billion), data from the Association of Mutual Funds inIndia showed. * However, fewer trading sessions during the month resultedin inflows through systematic investment plans dropping to298.45 billion rupees from 310.02 billion rupees in January. * "A notable feature of the month was the sharp pickup inflows into the mid-cap and small-cap (mutual fund) categories,"said Himanshu Srivastava of Morningstar Investment ResearchIndia. * Investments in gold exchange-traded funds slid sharply to52.55 billion rupees in February from 240.4 billion rupees inJanuary, when they surpassed equity mutual fund inflows for thefirst time. * Last month, the benchmark BSE Sensex index dropped 1.2%,while the Nifty 50 index dropped 0.6%. * Broader small-caps rose 0.3%, while mid-caps rose 1.2%. * Foreign investors turned net buyers in February afterthree months of outflows, purchasing shares worth 226.15 billionrupees. * While offloading 169.49 billion rupees of IT stocks lastmonth due to fears of an AI-led disruption, foreign investorsinvested in sectors such as capital goods, financials, metals,and energy. * Improving earnings, despite a one-time hit from new labourcodes, supported the buying last month. * India struck a trade deal with the U.S. in early February,which brought down the tariff on Indian goods to 18% from 50%earlier, granting Washington limited access to its market foragricultural products($1 = 91.9700 Indian rupees)
(Reporting by Nandan Mandayam in Bengaluru and Bharath Rajeswaran in Mumbai; Editing by Harikrishnan Nair)
