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 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.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.
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.