Strongest month for domestic equities this year – most indices and sectors delivered very good returns in July.
Broad Market Indices: Nifty (+8.9%) underperformed midcap (+11.7%) and was in line with small cap (+8.9%).
Performance deviation between sectors has continued to be large. Out of the 15 sectoral indices, NO sector is positive for both quarters of this year.
Autos (+7.3%) sector took some breather after outperforming for previous 3 months. Real Estate and Metals were top performing sectors this month (up 17%).
IT (+4.2%) , Pharma sector (+6%) continued to underperform. IT, Pharma and Metals are the only segments which are still negative on 1Y basis
Within Commodities: Deviation within sub sector performance continued. Metals out-performed after long period of underperformance, while Oil & Gas was underperformer after doing well for last few months
GLOBAL MARKETS
SUMMARY:
Equity:
Most global markets have bounced off their multi-month lows made in June as inflation concerns eased and expectations of fewer rate hikes from the US Federal Reserve (Fed) helped cool off bond yields and improve portfolio flows.
Asian market except India under-performed global peers
US: With Fed rate hikes broadly priced in, US markets did very well (up 9-12%)
Eurozone: Except France, under-performed US markets
China, Hong Kong : Worst performer for the month. Rising virus cases, mortgage boycotts and fresh regulatory action on internet giants triggered knee-jerk selling
India: Equities outperformed global peers with reduction in FII outflows, lower crude and commodity prices and quarterly earnings in line with expectations. Amongst the bigger economies, India is only market which has delivered double digit returns over the last 1Y
Currencies:
There was mixed performance by currencies vis-à-vis USD, with few continuing to depreciate while some appreciating as well
Indian Rupee continued to depreciate but to a smaller extent
