Billionz Multi-Asset Weekly Newsletter
Nifty Holds Range as Investors Look Beyond Large Caps for Alpha
Global Developments:
US treasury said this week that it would at least double buyback of longer dated US Treasuries. This is to reduce borrowing costs as long term yields are extremely elevated. This led to a brief rally in US treasuries. The gains were however short lived
US said it would take unprecedented measures to cripple Iranian economy. A press conference on the same is due on Monday
RBI minutes were much more hawkish as compared to the policy statement which was quite neutral. Domestic rates and bonds sold off in reaction to the minutes
Premature closure of RBI swap window resulted in pressure on Rupee this week.
Global Equity Markets:
Domestic Equities
- Nifty50 valuations remain relatively moderate at 20.5x trailing and 17.9x forward P/E, compared with 30.7x/29x for Midcap100 and 34x/32.5x for Smallcap250.
- The sharp premium in mid- and small-caps highlights elevated expectations, making stock selection and sector allocation increasingly important for generating alpha.
- 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 bond yields moved higher this week, led by France (+7bps) and Germany (+4bps), as fiscal and inflation concerns kept long-end yields elevated, while Japan was the key exception with yields falling 4bps.
India Rates & Flows:
- Domestic bonds sold off sharply, with the 10Y G-Sec rising 9bps to 6.85% and OIS rates moving higher, while FPIs remained net sellers of USD 250mn of domestic bonds in August so far.
Real Estate
- Arnya RealEstates Fund Advisors is nearing the final close of its maiden real estate debt fund, which has committed ~₹1,000 crore across 11 transactions and is expected to reach ~₹1,200 crore in total commitments.
- The firm is preparing to launch its second real estate debt fund, while expanding its platform through residential equity investments, including a ₹1,030 crore first close with Supreme Universal.
IPOs
- IPO activity peaks next week with nine mainboard issues opening, led by Symbiotec Pharmalab’s ₹1,757 crore IPO, making it the busiest subscription week of August.
- Eight companies are also set to list, with strong institutional participation in Symbiotec likely to provide an important read-through for primary market sentiment and the pharma/biotech IPO pipeline.
Private Equity & Venture Capital
- PE/VC activity remained broad-based, with Navi Technologies’ $100 million fundraise from Prosus leading the week, followed by 20Cube 3PL Solutions at $52.2 million and BookMyShow at a reported $40–50 million.
- M&A activity picked up, with nine transactions announced versus five in the previous week, led by Advanta Enterprises’ $110 million acquisition of Misr Hytech Seed International.
Commodities
Commodities rallied broadly this week, led by Brent (+6.6%) and WTI (+5.7%) amid elevated geopolitical tensions, while Gold (+5.2%) and Silver (+6.7%) surged on safe-haven demand and a weaker dollar; European Natural Gas also gained 7.2%, whereas base metals remained largely subdued.
What’s New in the World of Wealth Management
Netweb Technologies completed a Rs 1,200 crore QIP this week with participation from Nomura, Goldman Sachs, and ICICI Prudential Mutual Fund, signaling continued institutional appetite for India’s data center and high-performance computing theme. On the regulatory front, SEBI proposed a Fixed Income Channel Partner framework through Online Bond Platforms modelled on the mutual fund distributor network to expand corporate bond distribution to non-metro regions, with public comments open until September 11. This directly addresses India’s most persistent corporate bond market gap: last-mile retail distribution beyond the top three cities. SAT meanwhile rejected Danny Gaekwad’s competing open offer for Religare, ruling he missed the mandatory 15-day SEBI takeover deadline a clean enforcement signal that procedural timelines in M&A will be strictly applied. India and Canada are targeting a CEPA by end of 2026 after three rounds of negotiations — a trade deal that, if concluded, could open access to one of the world’s largest pension capital pools for Indian financial services firms.
Our Views: What we Like?
Equities : Nifty50 continues to remain in tight ranges. We expect the 23800-24800 range to hold for now.Action seems to be outside large caps. One can look at SIFs to generate alpha in a range bound market. We have exited our contrarion IT overweight position in this relief rally. We are overweight REITs, Fin Nifty, FMCG, Chemicals in our model portfolio. We have also taken exposure to Nifty Next50.Overall we believe its a market for active sector allocation and stock selection. One can look to capitalize on specific themes i.e. Energy transition and AI.
Fixed Income : Surprisingly hawkish RBI minutes led to a sell off in rates and bonds this week. We expect the RBI to conduct long term VRRRs to suck liquidity on a more durable basis as current surplus is inconsistent with tone of meeting minutes. We could see some pressure on money market rates in near term.
Commodities: We continue to remain bullish precious metals and base metals. We believe hard assets will continue to do well.
FX : We see the Rupee trade a 94.80-96.80 range over the next few weeks. Exporters are advised to hedge cautiously only to extent of in-hand orders through participating structures while importers are advised to hedge on any dips.
