New Delhi: India’s equity markets showed a clear preference for smaller companies in August as micro-caps gained 2.6 per cent while small-caps were marginally positive, even as large-caps fell 4.1 per cent, a report has said.
Investors shifted towards safety, commodities and select pockets as equities fell 2.1 per cent amid broad-based pressure, the report from Vallum Capital said
Only IPO and defence remained in positive territory among the 23 themes, returning over 2.2 per cent and over 1.4 per cent, respectively.
Auto and Railways were the biggest laggards, falling 6.5 per cent and 6.4 per cent, while Technology declined 6.1 per cent. The divergence within sectors was particularly sharp as Internet & Digital gained 3.2 per cent, while the IT Index fell 9.1 per cent.
The resilience of smaller stocks suggested that the weakness was not uniform across market capitalisation and that selectivity remained important.
“The broader regime therefore remains one of domestic equity pressure, selective strength in smaller companies and momentum-led pockets, while traditional defensive labels have struggled,” the report noted.
The domestic market turned distinctly risk-off, with equity falling 2.1 per cent in August, while money market assets were the only major asset class to deliver a positive monthly return at over 0.5 per cent.
Commodities declined 0.5 per cent during the month but remained the strongest performer on a year-to-date basis, returning over 12 per cent, nearly nine times equity’s over 1.4 per cent YTD return.
Fixed income was flat for the month and delivered over 3.7 per cent YTD return. Commodities saw inflows rise from Rs 4,081 crore to Rs 4,800 crore, suggesting that investors continued to seek exposure to the commodity theme despite its marginal monthly decline.
(IANS)
