Nifty August review: Defence, metals outperform as FMCG and media stocks lag

The NIFTY50 ended August lower, breaking its two-month winning run and falling 1.2% during the month. The index remained volatile, moving between an intra-month high of 24,774 and a low of 23,993.

The monthly breadth was weak, with 31 of the 50 NIFTY50 stocks ending August in the red, while 19 closed higher.

ITC was the biggest loser among the index constituents, falling 10.5%. Bharti Airtel, TMPV and Power Grid declined 7.9% each, while SBI Life Insurance lost 7.6%. HDFC Bank fell 5.9% and Reliance Industries declined 1.3%.

Grasim led the gainers with an 8.1% rise, followed by Shriram Finance at 7.8%, Bharat Electronics at 7.6%, Kotak Mahindra Bank at 7.4% and Axis Bank at 6%.

The broader market, however, continued to outperform the benchmark. The NIFTY Midcap 100 gained more than 2%, while the NIFTY Smallcap 100 rose over 3% in August. The outperformance came as midcap and smallcap companies reported more than 20% growth in profitability in Q1FY27, attracting inflows from domestic and overseas institutional investors.

Defence stocks lead sectoral gains

The NIFTY India Defence index gained 4.1% in August and touched fresh record highs. The rally was spread across the sector, with 16 of its 19 constituents ending the month higher.

MTAR Technologies gained 20%, Paras Defence rose 17%, Dynamatic Technologies advanced 15.9% and Solar Industries gained 10.8%. On the other side, Astra Microwave fell 10%, while Garden Reach Shipbuilders and Bharat Forge declined 2.5% and 5.9%, respectively.

Smaller defence companies such as MTAR Technologies, Paras Defence and Solar Industries outperformed larger names including Hindustan Aeronautics, Bharat Electronics and Cochin Shipyard.

Metals gain on higher prices

The NIFTY Metals index rose 3.7% in August, helped by optimism around global metal prices and a rise in domestic steel prices.

Welspun Corp was the biggest gainer in the index, surging 44% during the month. Steel Authority of India gained 16.8%, APL Apollo Tubes 16.5%, Hindustan Zinc 13.2% and Hindustan Copper 9.5%.

Eleven of the 15 stocks in the index ended August higher. Lloyds Metals fell 10%, while Jindal Stainless, Adani Enterprises and Tata Steel declined 4%, 3.6% and 2.5%, respectively.

FMCG remains under pressure

The NIFTY FMCG index was the worst-performing sector in August, falling 6.3% and slipping to a six-month low. Fourteen of its 15 constituents ended the month lower.

Godrej Consumer Products fell 16.6%, followed by Godrej Agrovet at 12.4%, Dabur at 11.4%, Emami at 11.2% and United Breweries at 10%. Radico Khaitan was the only stock in the index to gain, rising 0.9%.

The sector continued to face selling pressure despite earnings growth supported by price revisions. Competition from informal brands and new entrants is also taking market share from established FMCG companies.

On the charts, the index remained below its monthly 50-EMA for the sixth consecutive month, pointing to continued weakness.

Media stocks give up recent gains

The NIFTY Media index fell 3.7% in August after gaining nearly 28% over the previous four months. Most stocks in the index ended lower, with Nazara Technologies and PVR Inox the notable exceptions, gaining 21.7% and 7.5%, respectively.

Zee Entertainment and Network18 were among the major drags, falling 16.8% and 5.5%.

Media stocks remained weak as advertising spending stayed subdued ahead of the festive season. The index also failed to hold above its monthly 20-EMA during August, keeping the near-term trend sideways.

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