Mumbai, Sept. 19 -- India's stock markets are being supported largely by consistent mutual fund investments, which are preventing a deeper fall despite heavy outflows, according to a report by Jefferies.

The report said that without these inflows, the high level of supply in the market could have led to a collapse.

It stated, "Indian market will continue to trade sideways for the rest of the year as mutual fund inflows continue to absorb equity supply. Importantly, the supply is not expected to subside, barring a market collapse, with Jefferies' India office estimating USD 50-70bn of supply in the next 12 months".

The report noted that Indian markets are expected to trade sideways for the rest of the year as steady mutual fund inflows ...