Street signs: Multi-asset funds rise; Nifty key levels, domestic IPO flows

A resurgent gold rally has lifted multi-asset funds back into contention, widening their return edge over key equity categories despite lower risk exposure

Multi-asset funds regain pace as gold rally resumes 

Multi-asset funds are set to end the year on a strong note with the gold and silver rally regaining momentum. Their one-year performance gap with equity funds has widened in recent weeks. On average, multi-asset funds have delivered 18 per cent return in the one-year period compared to flexicap funds’ 4 per cent. Despite carrying a lower risk, multi-asset funds are now ahead in medium- term returns vis-a-vis some of the key equity scheme categories. For example, over the last three years, they have delivered an average annualised return of around 20 per cent, while flexicap funds have generated an average annualised return of 18 per cent. Gold, which accounts for 10-20 per cent of most multi-asset fund portfolios, has jumped by over 9 per cent in the last month. 

26,200-26,250 key Nifty resistance level this week 

The benchmark Nifty ended last week with a 0.3 per cent gain after declining over the previous three weeks. Holiday-induced muted activity was clearly visible on the Dalal Street, as the Nifty traded within a narrow range. Moreover, a lack of clarity on the India-US trade deal has made investors circumspect, with investors selling on every rise. December-quarter earnings and any breakthrough in the Indo-US nuclear deal will be key drivers of any sharp gains. “Going ahead, the 26,200-26,250 zone is expected to act as a crucial resistance band for the Nifty. A sustained move above 26,250 could pave the way for a sharp upside rally towards 26,500, followed by 26,650 in the short term. On the downside, the 25,900-25,850 zone will act as an important support for the index,” said Sudeep Shah, head – technical and derivatives research, SBI Securities. 

Domestic flows reshape December IPO calendar 

Barring the listing of Gujarat Kidney and Super Speciality, there will be no activity related to initial public offerings (IPOs) this week. However, the month as a whole was quite busy, with 10 IPOs hitting the market. The last month of the year used to be a tepid period for new issuances, but this trend has changed after pandemic. At least seven companies have launched IPOs every December since 2021. Bankers have attributed this change to buying support from strong domestic institutional inflows seeking deployment opportunities. “FPI support was crucial in the past. However, the significant shift from bank deposits to equities in the recent past has meant that issues up to a certain size can be executed without relying on foreign investors,” said a banker.