The Indian stock markets ended higher last week – yet again touching a historic all-time high. A flush of liquidity in global markets coupled with positive developments over the past week have led to this.

Last week, market movements were shaped by the following couple of factors. The first and most prominent market mover seemed to have been the strong corporate earnings season in the June quarter. Many companies, especially in IT and steel sector have performed better than market expectations – this gave investors confidence in business sentiment and strong recovery post covid. Moreover, inflation seemed to have cooled-off as numbers came in lower in July when compared with previous months. This gives breathing space for the RBI to continue with its loose monetary policy stance. The rush of new IPOs in 2021, hopeful macroeconomic data in the US and strong performance across various sectors have also contributed to this bull run.

Quote of the week

If you don’t find a way to make money while you sleep, you will work until you die.

Warren Buffett

Markets Update

The Big Picture

• Industrial production measures the output of businesses integrated into the industrial sector of the economy. India’s industrial production rose by 13.6% in June 2021 when compared to the same period last year, slightly above market expectations of 13.5%.
• The annual Consumer Price Inflation (CPI) in India eased to 5.59% in July 2021 compared to 6.26% in June and lower than market forecasts of 5.78%.
• India’s trade deficit (imports minus exports) stood at $10.97 billion in July 2021. The trade gap more than doubled from $4.83 billion a year earlier, as imports jumped to $46.4 billion – the second-highest in history.
• Deposit growth, which measures the growth in commercial bank deposits, stood at 9.8% in the fortnight ended July 30th, 2021 when compared to the same period last year.
• Loan growth, which measures the growth in commercial bank loans, stood at 6.10% in the fortnight ended July 30th, 2021 when compared to the same period last year.

Investing Insights

India’s booming FMCG industry

The Fast Moving Consumer Goods (FMCG) industry is a very unique industry, mostly because at the very heart of this industry is an average consumer – just like you and me. The world’s largest economies are also those that have the most powerful consumers in terms of spending power. Hence, it only makes sense for India to focus on its consumers if it plans to expand its economy into a large powerhouse.

India’s FMCG industry is thus on the radar of the government and investors. A slew of growth drivers are defining the growth path of this industry – rising rural incomes, growth of e-commerce and advancement of logistics, the advent of superior technology and newer growth strategies by companies – all are contributing to what might be a very bright future for FMCG in India. Read more, here.

Inside smallcase

SIPs with smallcase

SIP stands for Systematic Investment Plan. As the name suggests, it helps the investor allocate funds in a smart and disciplined manner. Timing the markets is a difficult task, but SIP eliminates that worry. With SIP, you can invest fixed amounts at regular intervals. You, then, stand to have an advantage over market volatility and do not need to monitor the markets constantly.

Buy more when the price is low, less when the price is high. If on the SIP date, the stock price is high, you will be able to buy a lesser number of shares. And vice versa. This ensures that you invest more at lower prices and less at higher prices, and hence your overall cost of acquisition gets averaged out. Try out investing with SIPs in smallcases for passive, long-term wealth creation. Read more about SIPs, here.

And that’s a wrap for this week. Take care, and happy investing!