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Below is Perspective on AMFI data by Mr. Umang Thaker, Head of Products, Motilal Oswal AMC

“August has been an eventful month for the equity markets where nifty scaled newer milestone of 17,000 with the last 1000 points added in just 19 trading days. The frontline index outperformed MidCap/SmallCap index for the first time in FY21. Broad based gains were seen in all nifty constituents with IT and consumer sectors leading. FII net flow reversed to positive 1 Bn compared to 1.7Bn outflow in Jul’21.

In terms of net mutual fund flows in Equity category the Flexicap category led the pack followed by Focused, Sectoral/Thematic and Large and MidCap in that order. The balanced advantage category saw the highest increase on the back of a large NFO. The GDP growth print and increasing pace of vaccination were the other encouraging news in August. Nominal GDP grew 31.7% YoY in 1QFY22, against contraction of 22.3% YoY in 1QFY21 and the pace of vaccination increased to 8.4m doses per day in the last seven days of August. 1QFY22 earnings were broadly in line with street expectations, prompting consensus estimates holding on to their full year FY22 Nifty EPS projections. Big is certainly getting better - In-spite of a very severe second wave, large companies (ex – financial) were able to control costs while maintaining pricing power to increase their EBIDTA margins and profitability. EPS growth over the next two years will eventually determine whether markets should sustain these valuations going forward.”

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