Indian mutual funds reduced their exposure to public-sector bank stocks by around 6.4 percent in October as valuations appeared extended after a prolonged rally. Fund managers redirected allocations toward energy and FMCG sectors where earnings visibility remains strong. Analysts said portfolio rebalancing signals profit-booking rather than structural bearishness. Despite the rotation, mutual fund inflows stayed resilient, supported by steady SIP subscriptions. Market experts expect defensive and infrastructure themes to gain weight in fund portfolios as investors balance growth exposure with valuation discipline.