Large cap stocks gain flavour, outperform mid/small caps in August

Mumbai, Sep 7 In a major change in market trend, large cap stocks outperformed the mid and small cap stocks in August.

It was the first time this year that large cap stocks outperformed both mid and small cap scrips, which were largely dominating the bull run amid the pandemic.

Data from Motilal Oswal Financial Services showed that 40 out of the 50 Nifty companies posted gains in August 2021.

The data said that Bajaj twins Bajaj Finance and Bajaj Finserv outperformed during the month, while defencive stocks made a comeback.

So far in 2021, metals continue to lead outperformance, while auto remains a laggard.

The Nifty crossed the 17,000-mark in August, putting India ahead of the emerging markets and global peers.

“Nifty outperforms mid/small cap index for first time in CY21. From the lows in March of this year, the global equities markets have increased by 75 per cent in market capitalisation to $119 trillion,” the Motilal Oswal report said.

While closely tracking the reduction in real yields, Bank Nifty has lagged Nifty.

As the top 100 firms gain from cost efficiency and pricing power to enhance EBITDA margins and profits, big corporations are getting bigger, it said.

“The first quarter of the FY22 earnings season has broadly met the expectations, with cyclicals leading the way. The 1QFY22 real/nominal GDP increased by 20.1 per cent, 31.7 per cent YoY, helped by a soft 1QFY21 base,” the report said.

Investment and private consumption were sharp contributors to the economic growth.

Around 59 per cent of BSE-200 constituents gained in August 2021. Adani Transmission and Adani Gas gained by 77 per cent and 63 per cent on a month-month basis, respectively.

In 2021, 46 companies have gained more than 50 per cent, while 8 companies have gained 2x. Around 41 per cent of BSE-200 companies declined in August 2021.

In 2021, 23 companies have posted declines. Vodafone Idea, Bandhan Bank, RBL Bank, Alembic Pharma, Amara Raja, Zee, Biocon, and Aurobindo Pharma have declined more than 20 per cent.

The Nifty moved from 16,000 to 17,000 within 19 trading days, one of the fastest 1,000-point jumps in its journey. In its is journey from 16,000 to 17,000, HDFC Bank, Reliance Industries and TCS contributed 50 per cent of the 1,000-point gain.