Highest inflows by domestic funds since April 2020

Domestic institutional investors (DIIs) recorded the eighth consecutive month of inflows in March 2024 at $6.8 billion, the highest since April 2020, Motilal Oswal Financial Services said.

FIIs too recorded strong inflows of $4 billion in March 2024. FII inflows into Indian equities stand at $1.4 billion in CY24 YTD vs. inflows of $21.4 billion in CY23. DII inflows into equities in CY24 YTD continue to be strong at $13.1 billion versus $22.3 billion in CY23.

The Nifty touched a fresh high of 22,527 in March 2024 and ended 1.6 per cent higher MoM at 22,327. The index has closed higher for the second successive month, the brokerage said.

Notably, the index was extremely volatile and swung around 816 points before closing 344 points higher. The Nifty is up 2.7 per cent in CY24YTD. During the last 12 months, midcaps and small caps have gained 60 per cent and 70 per cent, respectively, while large caps have risen 29 per cent only. During the last five years, midcaps have outperformed large caps by 71 per cent, while small caps have outperformed large caps by 37 per cent.

Among the sectors, Capital Goods (+6 per cent), Automobiles (+5 per cent), Metals (+4 per cent), Infrastructure (+3 per cent), and Private Banks (+2 per cent) were the top gainers, whereas Media (-12 per cent), Technology (-7 per cent), and Real Estate (-1 per cent) were the key laggards.

Bajaj Auto (+16 per cent), Maruti Suzuki (+12 per cent), Bajaj Finance (+12 per cent), Hindalco (+11 per cent), and Tata Steel (+11 per cent) were the top performers, while Infosys (-11 per cent), Tata Consumer (-8 per cent), Wipro (-7 per cent), HCL Tech (-7 per cent), and LTIMindtree (-7 per cent) were the key laggards, the brokerage said.

Nifty is trading at a 12-month forward P/E ratio of 19.4x, which is largely in line with its long-period average (LPA) of 20.3x even as broader markets trade at expensive valuations (the NSE Midcap 100 index trading at 46 per cent premium to Nifty), it added.