Continuing their selling spree for the 8th month in a row, mutual funds offloaded shares worth about Rs 2,700 crore in April on redemption pressure.
On the other hand, they pumped in nearly Rs 50,000 crore in the debt market during the month.
As per the Securities and Exchange Board of India (Sebi) data, mutual funds offloaded a net amount of Rs 2,698 crore from equities.
This was the 8th consecutive month of net outflows by * Mutual Funds: Top Profit-making Schemes after they invested a net sum of Rs 1,607 crore in the stock market in August.
Since the beginning of the year, mutual funds have sold shares worth Rs 10,450 crore. However, they have taken a bullish stance on the debt market during the period and have made a net investment of Rs 2.57 lakh crore.
"Mutual funds have seen a rise in inflows mainly due to gains in debt fund. However, equity funds have been facing redemption pressure for some time," a market participant said.
"Equity fund investors have been pulling out at higher levels of the market, indicating their lack of confidence in the market's ability to sustain at these levels," he added.
Analysts are however optimistic about equity schemes in 2014 on hopes that a stable government after the general elections this month will help boost stock markets.
A mutual fund is an investment vehicle with a pool of funds collected from investors to buy stocks, bonds, money market instruments and similar assets.
At present, there are about 1,638 schemes under mutual funds, of which 1,178 schemes (72 per cent of the overall schemes) were income or debt oriented while about 363 schemes (22 per cent of total schemes) were growth or equity related.