Billionz Multi-Asset Weekly Newsletter
Equity Markets Await a Catalyst as Volatility Hits Multi-Month Lows
Global Developments: RBI said that so far USD 56.9bn had been received under its swap facility with USD 52.3bn in the form of FCNR B deposits. Encouraged by the response, it announced early closure of FCNR B swap window on 31st Aug instead of 30th Sep earlier.
India goods trade deficit hit a 6 month high of USD 32bn in July despite record exports. In further evidence of slowing US economy, US headline and core CPI came in line with expectations while PPI came in below expectations.
US July retail sales also came in weaker than expected.
Trump said he will soon declare the SoH as US territory. Meanwhile, diplomatic talks remain deadlocked and that is keeping geopolitical risk premium elevated.
Domestic Equities :
Nifty50 valuations remain relatively comfortable at 20.5x trailing and 17.1x forward P/E.
Midcaps and smallcaps remain richly valued at 30.1x and 28.5x trailing P/E, leaving limited room for earnings disappointments.
India VIX dropped to 11.30 from 12.15 last week
NSE500 cumulative advance decline was -328 for the week.
290 stocks in NSE500 are currently above their 200 day moving average
FPIs have invested net USD 1.7bn in domestic equities in August so far.
Finolex Cables (+21.7%) led the weekly gainers, while Aditya Birla Fashion & Retail (-11.6%) was the biggest loser.
FPI equity inflows moderated to ₹1,228 crore this week from ₹2,888 crore previously, while DII inflows strengthened to ₹9,285 crore from ₹7,767 crore.
Below are the graphical representations for how key benchmark indices performed this week & how sectoral indices performed this week:
Fixed Income
Global Rates:
- Global 10Y yields were mixed, with UK, France, Japan and South Korea rising 3–6bps, while US yields eased 1bp to 4.69%.
India Rates & Flows:
- India’s 10Y G-sec yield eased 1bp to 6.76%, while surplus liquidity above ₹3 lakh crore continues to keep money-market rates under pressure.
Real Estate :
- CPPIB plans to invest up to ₹3,000 crore in Prestige Hospitality Ventures for up to a 28% stake, highlighting strong foreign institutional interest in India’s hospitality sector
- Brookfield India REIT and NCW Asset Management agreed to acquire a ₹1,700 crore Grade-A office asset in Mumbai’s BKC, underscoring continued institutional demand for premium commercial real estate.
IPOs:
- IPO activity is set to pick up sharply next week, with four mainboard issues spanning jewellery, industrial real estate and media, offering investors diverse opportunities.
- Lalithaa Jewellery Mart and Horizon Industrial Parks headline the pipeline, while Shankesh Jewellers and Sunshine Pictures add further depth to the primary market.
Private Equity & Venture Capital :
- PE/VC activity moderated in deal count but gained in value, with 20 companies raising $2.1bn, led by large investments in infrastructure, renewable energy and real estate.
- M&A remained subdued with five disclosed deals, though Bank of America’s proposed $1.92bn investment for a 49.9% stake in Jio Credit emerged as the week’s standout transaction.
Commodities:
Energy prices led the commodities rally this week, with Brent (+6.0%), WTI (+5.4%) and European natural gas (+10.6%) sharply higher, while base and precious metals remained relatively steady.
What’s New in the World of Wealth Management :
SEBI upheld interim restrictions against Nirman Agri Genetics and its promoter this week after investigations confirmed the diversion of Rs 18.89 crore — 93% of the company’s total SME IPO proceeds — into fictitious and promoter-linked entities. This is part of a wider SEBI crackdown following an identical playbook across multiple SME issuers: IPO proceeds transferred out on listing day itself, disguised as issue-related expenses, routed to promoter-controlled shells. Merchant bankers facilitating these diversions are now facing registration cancellations alongside the issuer — a shift from disclosure-based oversight to transaction-level surveillance of fund utilisation that every HNI and institutional allocator should factor into their SME IPO due diligence process. Garuda Aerospace received SEBI approval for a Rs 750 crore drone-tech IPO — adding a first-of-its-kind defence drone listing to an already record pipeline of Rs 2.77 lakh crore in SEBI-approved IPOs across 174 companies awaiting market windows.
Our Views: What we Like?
Equities : Nifty50 is extremely range bound and vols have collapsed with VIX back to 11 handle. We expect the Nifty50 to remain range bound in 23800-24800.Banks and IT are alternatively outperforming and underperforming, keeping index range bound.Action lies outside of the index. It is a stock pickers market. Active sector rotation and stock selection is the key. We are overweight Fin Nifty, IT and REITs in our model portfolio.
Fixed Income : Yield on the 10y is expected to remain range bound in 6.70-6.95% over the next few weeks.Banking system liquidity surplus is likely to keep money market rates under pressure until RBI withdraws liquidity on durable basis.
Commodities : We continue to remain bullish on precious metals. Energy prices are likely to be headline driven.
FX: G10 FX vols have collapsed. Price action is extremely dull and range bound. We expect Rupee to remain rangebound in 94.80-96.50 over next few weeks with weakening bias.
