The current financial tsunami in the US has hit the technology funds and IT and technology stocks the hardest in the last month ended September 19. However, the returns on the equity-linked banking funds and banking stocks have appreciated the maximum during this corresponding period.

According to Value Research, a research agency tracking the mutual funds industry, the return on technology funds dipped by 7.02%, which means a fund with Rs 100 value is currently selling at Rs 92.98. Compared to this, the BSE Teck index shed 4.43% or 132 points during this period. And, the BSE IT index dipped 5.15% or 197 points during the said period.

After technology funds, the FMCG funds were the second biggest losers but, ironically, FMCG stocks gained at the bourses. The return on the FMCG funds dipped 4.06% compared to BSE FMCG gaining by 1.98% or 43 points.

Among other equity-linked funds, the returns on the auto funds were negative, contrary to the gains made the constituent stocks at the bourses. The return on the auto funds dipped by 0.38% as against the gain of BSE Auto by 1.95% or 74 points during the corresponding period.

The benchmark index-linked Sensex funds were also the victim of the market meltdown. The return on the Sensex funds was negative to the tune of 3.45% as against the BSE Sensex going southward by 2.82% or 406 points during this period.

Interestingly, both the banking funds and stocks have gained the maximum in the midst of this market meltdown. The banking funds gained 2.51% and BSE Bankex gained the maximum of 6.71% or 446 points during this period.

A senior manager from a domestic fund house said that the return on the banking funds had gone up because of the good performance of the banking stocks. The market sentiment towards the banking stocks strengthened with the expectation that the Indian financial and banking sector will perform better as the crisis in the financial sector of US deepens.

The RBI?s quick decisions on market measures have also helped the banking sector. The apex bank has taken several decisions to improve the domestic liquidity in the financial market which also impact the banking sector positively, he said.

The financial turmoil in the US had caught the Indian market players unawares too. The news of Lehman Brothers going bankrupt had surprised everyone. Further, Merrill Lynch and AIG going public on a financial crunch further unnerved domestic market players.

However, with the markets stabilising following the US government bailouts, the Indian markets too breathed a sigh of relief. Rohini Malkani, economist at Citi India pointed out the equity market rallied following the decision of the US treasury to take measures to stabilise the US financial market.