Markets experienced high volatility in Aug’24 followed by all time high in Sep’24
The markets had throughout during this year formed newer highs with strong momentum and the same trend continued in Aug ’24 and Sep ’24. The month of Aug ’24 saw a positive close 1.1% with high volatility of 5.5% movement during the month. In Sep’24 market closed with a positive return of 2.2% with high volatility of 6% movement during the month. Nifty touched milestone of 25k and 26k during Aug and Sep month respectively whereas Sensex touched 82.6k and 85.9k which was also lifetime high at that point. DII bought INR 50k crores and 31k cores FII sold INR 20k crores in and bought 12k crores during Aug and Sep month respectively. This market rally could be attributed to continuous DII inflows into the market, global markets rally, liquidity chasing momentum, positive sentiment, IPO frenzy, discounting all positive factors and fundamentals. The volatility and minor corrections in between was experienced due to geo political events and stretched valuations but market sustained near top during this period. The same rally was broadly witnessed across sectors and even bigger in mid-cap and small-cap stocks. The Indian market has performed well in line with major markets during this period. In short term and YTD basis US market has outperformed Indian market whereas on a longer 3 year period Indian market has outperformed most of the markets including US market.
Sectoral performance & updates
The sectoral performances were also in the direction of the market and most of the indices also touched their life time high. Sectors that have done very well in Aug are Software, Pharma and FMCG and the sectors that were laggards have been PSU bank, realty and metal whereas Midcap underperformed and small cap performed in line with Nifty and large cap in this period. Sectors that have done very well in Sep were Metals, realty, Auto and the sectors that were laggards have been PSU bank, IT, pharma whereas Midcap and smallcap both underperformed Nifty and large cap in this period.
Outlook for the Indian Market
All Global markets experienced strong rally recently with heightened volatility and most have made their life time high last month. Indian market also made the life time high last month with broader market participation and IPO frenzy. Gold and silver after minor correction and consolidation in Jul’24 have rallied back in Aug and Sep. Gold closed at 72k/ 10 gm in Aug’24 and all time high of 75k in Sep month until that point. Silver closed at 83k/ kg in Aug’24 and near high of 91k / kg in Sep month until that point. It is rare feat when equity markets along with bullion market are making life time high simultaneously and consecutively. Midcap and small-cap have performed much better than large cap throughout the year and also trading at higher valuation compared to historical averages. We have been mentioning this since last few market updates that markets are near the top and over-valued zone along with several headwinds and to take cautionary approach. Further, have advised partial profit booking, remain diversified across asset class and rebalance it on basis of sectors, valuation, financial planning and risk management perspective. This stance continues and Investors can wait and do staggered entries for better entry at lower levels for fresh investment whereas diversified SIP based investing should continue irrespective of market trends in short term. The update for Oct’24 and future outlook will be published shortly.
