After a liftoff of the Indian stock market indices in June, July was like a cool-down month, where the major indices traded sideways with some signs of buying exhaustion. The Nifty50 ended with a positive return of 2.94%, whereas the Nifty500 outperformed with 3.83% returns.
Just like every sprinter needs to rest before the next run, the Indian stock markets seem to be resting and getting ready for the next sprint.
Meanwhile, there were some other headwinds that slowed the markets. Some of them include profit booking by FIIs at the higher levels, as the FII long ratio has dropped to 59% from 69% previously. This indicated long unwinding and further short build-up by foreign institutions.
Leaders & Laggards
Even though the Indian markets stopped for a breather, the models at Investmint seem to have been running well.
‘Back Up’ and ‘Sector Superstars’ were two of the best-performing models, with 10.56% and 7.73%, respectively. Back-Up is an Intraday model which works on the mean reversion strategy. On the other hand, Sector Superstars is a monthly model which picks top stocks from the top trending sectors.
Now talking about stocks, ENGINSERSIN, or Engineers India Limited (EIL), provided a monthly return of 37.01% as a part of the ‘Alpha Ally’ model. Followed by TATAMTRDVR, or Tata Motors DVR, which returned 34.92%, as a part of the ‘Buy High Sell Higher’ Model.
On the contrary, M&MFIN, or Mahindra & Mahindra Financial Services Limited (part of 'Alpha Ally'), and CIEINDIA, or CIE Automotive India, formerly Mahindra CIE Automotive (part of 'Sector Superstars'), were among the underperformers with a negative return of 13.67% and 12.37%, respectively.
Monthly Wrap Up
The month of July was yet another exciting month for investors, as there was both good as well as not-so-good news in the stock markets.
All the major banking companies did witness steady growth in their AUM, as well as compression in the NIM (Net Interest Margin). Strong inflows from domestic investors were seen, especially in the Small and Midcap space, followed by inflows from FPI (Foreign Portfolio Investors), continuing the 5-month streak. However, the FII were net sellers in the last two trading sessions of the month of July.
The next RBIs Monetary Policy meeting, which is scheduled for August 8th, is another event that is being eyed by investors. This, followed by any adverse global news, will affect our markets
The markets are currently at a critical level, from where it can continue, it’s gradually moving upwards or can face more selling and profit booking at higher levels in the month of August. Also, inflation is something that will control future rate hikes from central banks all over the world. So watch out for these indicators and keep investing systematically for a more disciplined investment.
To know more about systematic investing, have a look at this blog below.
Also, the next time you look at an investment opportunity, remember Kashmiri Saffron, as a kilogram of that can currently get you one Royal Enfield bike.