It’s said that pictures say more than a thousand words. The enclosed 1.080 version of “What We Are Seeing” will bring to you few charts and pictorial research.
It’s said that pictures say more than a thousand words. The enclosed 1.079 version of “What We Are Seeing” will bring to you few charts and pictorial research.
The trend in markets in August was significantly different from what
was seen over the past few months. For a change, the large caps
caught up and significantly outperformed the broader markets.
Divergence was strong, with the Nifty 50 logging in a sharp ~9% gain
while on the other hand, S&P BSE 250 Smallcap reporting a ~3%
decline. This ~12% divergence in a month between the large-cap vs
small cap was the highlight for the month.
This catch-up was long coming, given the huge surge seen in the broader markets in 2021 YTD and significant outperformance over the large caps. Renewed Foreign Portfolio Investor interests, particularly in index stocks, also led to large caps doing well.
Indian markets witnessed net Foreign Portfolio Investment inflows
of ~USD 2 billion for the month of August 2021, whereas Domestic
Institutional Investors (DII) net inflows were ~USD 4 billion. Domestic
investor interest continues to be strong, with a domestic mutual fund
garnering a record INR 14,500 crores in a New Fund Offering (NFO).
On the global front, the worry over tapering uncertainties too seems
to have abated. US FED has been very clear in its stance that liquidity
tapering if any will be gradual and that rate hikes are not coming. We
believe that modest rate hikes are already expected and priced in
and therefore the impact, if any, will be very moderate.