Billionz Multi-Asset Weekly Newsletter
Equities Edge Higher; Focus Shifts to Sector Allocation
Global Developments:Risk sentiment was positive into the start of the week with Trump canceling strikes over last weekend. Reports of Iran considering barring US ships through SoH in an agreement with Oman dented sentiment a bit mid-week.
Top military officials have been advising Trump to find an off ramp on Iran given that US military options seem limited.
RBI kept rates and stance unchanged and sounded less hawkish than expected, triggering a rally in bonds and rates
US July Labor data disappointed with headline NFP coming in at -23k against expected 80k. Previous print was revised lower as well. Average Hourly Earnings Growth slowed to 0.1% MoM (exp 0.3% MoM). Rate hike expectations by Fed have come off as a result. Key data point to focus on next week is the US July CPI print.
Domestic Equities:
- Nifty50 valuations remain relatively reasonable, at 20.7x trailing and 17.3x forward P/E, with forward valuations offering some comfort.
- Midcaps and smallcaps remain richly valued, trading at 29–30.5x trailing P/E, leaving less room for earnings disappointments.
- Imllied Volatility is quite compressed with India VIX at 12.15
- FPIs have invested net USD 1.2bn in domestic equities in August so far.
- About 59% I.e 290 of NSE500 stocks are currently above their 200 day moving average
- FIIs invested ₹2,888 crore this week, lower than ₹5,388 crore in the previous week, while DIIs stepped up buying to ₹7,767 crore from ₹5,950 crore
- Stock-specific action remained high, with Sapphire Foods (+21.1%) and Neuland Laboratories (+20%) among the top gainers, while Zee Entertainment (-17.8%) led the decliners.
Below are the graphical representations for how key benchmark indices performed this week & how sectoral indices performed this week:
Fixed Income
Global Rates: Major global 10Y yields eased this week, with US, UK and Germany yields down 2–3bps, while Australia was the key exception, rising 8bps.
India Rates & Flows:The India 10Y yield fell 7bps to 6.77%, while 1Y and 5Y OIS declined 15bps each amid surplus system liquidity of ~₹3.4 lakh crore; FPI flows into domestic bonds remained NIL in August MTD.
Real Estate
- SEBI’s proposed REIT/InvIT reforms could be a structural positive, allowing investment in minority stakes of under-construction projects and enabling earlier participation in asset development.
- Simpler approval norms and greater capital flexibility could accelerate project funding, expand future asset pipelines and strengthen India’s listed real estate and infrastructure investment ecosystem.
IPOs
- Molbio Diagnostics and Dhoot Transmission will open together from August 10–12, collectively raising around ₹4,007 crore, making it a key test of institutional demand.
- Molbio offers exposure to diagnostics and healthcare, while Dhoot Transmission provides a play on auto components and EV-led demand, broadening the upcoming IPO pipeline.
Private Equity & Venture Capital
- PE/VC activity rebounded sharply, with 27 companies raising over $1.8bn, marking the strongest weekly funding activity since late June, led by KKR’s $1.4bn Medicover Hospitals acquisition.
- Investor interest remained broad-based, with significant deals across healthcare, engineering, EVs, insurance, proptech and consumer businesses, signalling renewed appetite for Indian growth assets.
Commodities:
Commodities saw a sharp divergence this week, with precious metals leading the rally as Silver surged 10.4% and Gold gained 7.3% on strong safe-haven demand, while crude oil prices declined more than 7% amid easing geopolitical and supply concerns.
What’s New in the World of Wealth Management : The RBI MPC on August 5 unanimously held the repo rate at 5.25% with a neutral stance, with Governor Malhotra citing significantly stronger-than-expected FCNR(B) inflows since the last meeting cumulative foreign currency inflows through FCNR(B) deposits, overseas borrowings, and ECBs have now reached $40.81 billion. Private banks led by HDFC Bank and ICICI Bank raised FCNR(B) deposit rates by 25 basis points to capture flows before the RBI’s forex swap window closes on September 30, while Helios Capital’s Samir Arora publicly flagged that total FCNR deposits have hit $60 billion and cautioned the RBI to consider closing the scheme early. On the new products and regulatory front, the government proposed expanding tax incentives through the Taxation and Other Laws (Amendment) Bill, 2026, covering electronics, data centres, offshore funds, REITs, InvITs, and digital payments a broad fiscal push to attract global capital across India’s key growth verticals.
Our Views: What we Like?
Equities: Nifty50 continues to remain range bound in 23600-24600 in our view. We are at the upper end of that range. Earnings season has been positive overall. FPI flows have turned positive. We lean in favor of an upside break.We believe its time for active sector allocation and stock selection. We are overweight IT, REITs, Chemicals, Financials in our model portfolio.
Fixed Income: We expect the yield on the India 10y to trade a 6.70-6.95% range for next few weeks. Domestic system liquidity is likely to be in surplus on FCNR B flows. If the RBI sucks out liquidity through VRRR, ut will keep money market and shorter end of the curve under pressure. Until the RBI sucks out liquidity on a durable basis, the pressure is likely to continue.
Commodities: Both base and precious metals rallied this week. We continue to remain bullish on both. Hard assets will continue to do well in the medium term in our view.
FX: We expect a 94.10-96.50 range for Rupee over the next few weeks. Exporters are advised to hedge cautiously only to extent of in-hand orders and importers are advised to use the current dip to hedge.
