In short, the month of August can be expressed in a single term- ‘diverse.’ Even though the Nifty50 closed in the red (-1.63%), there were multiple upward and downward swings throughout the month. These were a result of multiple events that shaped the movement of the index.
To name a few:
- Retail inflation spiked to an 11-month high, and so did food inflation. This cautioned investors who were expecting further rate hikes by the RBI.
- The successful moon landing of the Chandrayaan-3 was a proud moment for Indians, which uplifted sentiments, and space-related stocks saw a large influx of investors. Not only this, but India was also able to bag a Gold in the ‘World Athletics Championship.’
- With below-average rainfall in most parts of India, food inflation is expected to rise further in the festive season.
All of these factors led the index to move in either direction through the week as bears and bulls kept playing the tug-of-war game.
Leaders & Laggards
Even though the markets were all over the place, multiple models in Investmint were moving in a singular direction, which is the upside.
About models, ‘Quick Short’ and ‘Alpha Ally’ were two of the best-performing models, with 19.27% and 11.05%, respectively. Quick Short is an Intraday model that works on the mean reversion strategy. On the other hand, the ‘Alpha Ally’ is a monthly model that selects stocks that beat the index based on the Capital asset pricing model.
Now, talking about stocks, IRFC and RAILTEL were the two stocks that were among the top performers of the entire month, with a return of 39.90% and 38.26%, respectively. IRFC was a part of the ‘Alpha Ally' model, whereas RAILTEL was a part of the ‘Buy High Sell Higher’ model.
On the flipside, TANLA and SUNFLAG were among the underperformers, with a negative 17.12% and 15.23%. TANLA was a part of the ‘Buy High Sell Higher’ model, whereas SUNFLAG was a part of the ‘Sector Superstars’ model.
Monthly Wrap Up
Even though August was not an easy market to extract profits for traders, multiple traders who traded via the Investmint app made good returns by following the quantitative models and the ‘Spot Signals’ on the new version of the Investmint app.
For now, this feature is limited to the beta version. Click the below link if you still haven’t signed up for the beta version.
Even though the Index closed lower for August, some sectors did witness strong buying from investors.
- The Space sector saw an uptick in investors as multiple companies, including MTAR, HAL, Paras Defence, and more, that were involved in the Chandrawaan-3 project witnessed double-digit growth in a week.
- Right before the onset of the festive season, auto manufacturer Maruti witnessed some positive pressure as investors flocked. to buy shares of the company.
- For the month of August, India remained the most favourable country to invest in by global investors, as they purchased close to $1.6 billion, whereas other Asian countries witnessed an outflow of close to $6 billion.
Image credit: ET
All of these factors indicate a strong future outlook for the Indian economy, which can affect stock prices positively. Also, the rebound of the markets from Friday’s low shows strength in the markets.
However, any external factor, such as ‘Rate Hikes’, ‘Policy changes’, etc., can have a critical impact on the markets in the upcoming weeks. Until then, keep an eye on the market and enjoy the tug-of-war game between the buyers and sellers.
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