ICICI Bank, Maruti, SBI, Among Top Picks For August; Analysts See Double-Digit Returns In A Month

After a major selloff seen in June 2022 on account of weaker global cues driven by higher inflation print in the US market, July 2022 turned out to be a recovery month. The Indian market performance showed resilience in the last month with the Nifty 50 recovering by 12 per cent from the bottom (since June 17, 2022). Both mid and small cap indices delivered an excellent performance as well and recovered higher than the large cap over the same period. The recovery was seen on account of tapering in the FIIs outflows along with a cool-off seen in the majority of the commodity prices including base metals and agri commodities. The US FED increasing the interest rates by 75bps in Jul’22 FOMC meeting was in line with the consensus expectations. Similar to the US FED, all other central banks across the globe are now focusing on controlling the inflationary pressure by front-loading the rising rates.

“We believe, though aggressive policy tightening will help in curbing inflationary pressure, persistently elevated Oil and commodity prices would continue to pose challenges to the market multiple in the next few quarters. The current India VIX is trading below LTA levels and the clear trend is likely to emerge only after the volatility stays at the lower levels for a longer time. Keeping these developments and overall weaker global cues in perspective, we expect the market performance to remain range-bound in the near term," the note stated.