● Indian markets touched all-time high: The Nifty-50 has touched the milestone of 20,000 in Sep’23. After a volatile and long journey from 18k to 19k, the Nifty-50 added the next 1,000 points (19k to 20k) relatively faster, despite multiple headwinds. The journey to the new high was led by a favourable blend of healthy macro and micro, moderating inflation and cooling commodity prices, expectation of global interest rates near its peak.

● Mid and small caps are outperforming large caps: Mid and small caps continue to outperform the large caps in September 2023 as well. Nifty50/Nifty Midcap100/Nifty Smallcap100 indices are up 8%/28%/31% in CY23YTD respectively. The rally in the broader market was mainly led by healthy retail participation led by all time high monthly SIPs.

● FII flows positive in CY23YTD however weakens in Sep’23: After reporting cumulative outflows between Oct’21 and Feb’23, FII flows bounced back in the last six months with cumulative inflows of USD15.1b in CY23YTD while DII inflows stood at USD15.7b. However, FII were net sellers in Sep’23 with outflow of USD1.9b whereas DII remained net buyers with inflows of USD2.4b.

● Healthy corporate earnings: India’s corporate earnings in 1QFY24 continue remain strong. The strong corporate earnings growth was backed by (1) declining input cost for manufacturing companies, (2) strong infrastructure and residential demand, and (3) healthy credit growth for BFSI sector.