Midcap & smallcap stocks stumble, Reliance Retail sees new investment & more

NIFTY50: 19,993 ▼ 3 (-0.02%)
SENSEX: 67,221 ▲ 94 (+0.14%)

• Benchmark indices closed flat, as midcap and smallcap indices stumbled
• In all, 30 of the NIFTY50 stocks closed in the red
• India’s retail inflation eased to 6.83% in August 2023 from 7.44% in July 2023 

Among the NIFTY sectoral indices, IT (+1.0%) and Pharma (+0.1%) were the only gainers, while Media (-4.3%) and Realty (-3.2%) were the top losers.

What’s trending

⭐ Midcap and Smallcap stocks witness meltdown 

Nifty Midcap100 and Smallcap100 indices declined 3% and 4.1%, respectively. Both indices saw significant fall as investors rush to book profits in these stocks, after markets touched new highs in yesterday's trading session.  

⭐ KKR to buy additional stake in Reliance Retail 

Global investment firm KKR is set to invest an additional ₹2,069.5 crore in Reliance Retail Ventures (RRVL) for 0.25% stake. This new investment values RRVL at a pre-money value of ₹8.36 lakh crore. This investment will take KKR’s total equity stake in RRVL to 1.42%.

⭐ Coal India to invest big on green projects 

Coal India plans to make a capital investment of around ₹24,750 crore in the next few years towards eco-friendly coal transportation. The company plans to set up 61 first mile connectivity (FMC) projects with a combined capacity of 763.5 million tonnes per annum (MTPA).

⭐ Oil gains amid upbeat demand outlook

Brent Crude Oil Futures are up 1.2% today, trading close to $92 per barrel. This comes after the Organization of the Petroleum Exporting Countries (OPEC) said it expects world oil demand to rise by 2.25 million barrels per day (bpd) in 2024, compared with a growth of 2.44 million bpd in 2023. Both forecasts were unchanged from last month.

In Focus

Mutual fund inflows surge in August 

Mutual fund investors seem to be betting big on Indian markets. In August 2023, investors pumped in ₹20,245 crore net in equity mutual funds, a rise of 165% over July 2023. What factors led to this growth? Let’s explore.

SIPs investment at record level 

Net inflows into equity mutual funds crossed the ₹20,000 crore mark—the highest in the last five months—driven by record investments through systematic investment plan (SIP) route. The gross monthly SIP contribution reached an all-time high of ₹15,813 crore in August. A record 35 lakh new SIPs were registered as per data released by mutual fund industry body, AMFI. Meanwhile, SIP asset under management (AUM) rose to ₹8.4 lakh crore, up 1.7% compared to previous month. 

Investors belief in India growth story 

Experts believe prospects of better economic growth in India over the next 10 to 15 years have increased the conviction of investors to stay invested in mutual funds. Moreover, markets took a breather in August with the benchmark index NIFTY50 declining 2.5% ending its five-month winning streak. This offered investors the right opportunity to pump-in more investments. 

In addition, MF redemptions declined by 19% in August, after staying elevated in the previous three months owing to profit booking.

Segments that saw highest inflows

Among equity funds, small-cap schemes continue to see highest net inflows of ₹4,264 crore. Meanwhile, sectoral and thematic schemes secured ₹4,805 net inflow, primarily due to launch of five new schemes in the category. 

Large-cap schemes saw net outflows of ₹348 crore in August. However, the pace of outflows declined when compared to July, which had seen outflows worth ₹1,880 crore.

Gold ETFs see strong traction

 Other than equity schemes, Gold exchange-traded funds (ETFs) saw a significant spike in investments, touching a 16-month high of  ₹1,028 crore. Experts believe this is because gold retains its appeal as a safe haven amid high inflation and rising interest rates globally. 

Overall, the robust inflows into equity and hybrid schemes led to a 0.6% month-on-month rise in industry’s total AUM, which stood at ₹46.63 lakh crore as of 31 August.

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