Falling inflation and crude prices lift Nifty, but few PMS strategies outperform
The rally leading up to Diwali continued with indices moving up strongly in November as well. Falling crude oil prices and cooling inflation rates propelled the markets, with the Nifty rising by a strong 4.14% in November. The move was mostly led by large-cap stocks. Midcap and small-cap indices underperformed, making the rise a narrowly led rally. However, the BSE 500 delivered a 3.32% return for the month, though it was still lower than Nifty’s move. Foreign Institutional Investors (FIIs) net bought Rs. 22,546 crores worth of shares in November. In general, FIIs buy blue-chip index stocks, which may have led to Nifty’s outperformance. Green shoots of lower inflation in the US and Euro Zone aided positive sentiments.
However, it was a weak show from PMS players during the month as only 36 of the 308 (less than 1 in 8) strategies outperformed the Nifty. However, 255 strategies delivered positive returns in November.
Multi-cap PMS strategies dominated the list of top performers compared to other investment approaches. Funds with large-sized assets underperformed the indices in November.