Nifty Fell. The Smaller You Went, The Better You Did.

Aug’26

Nifty 50 slipped 1.1% in August, but that headline number hides most of the story. Move down the market-cap ladder and returns kept getting better: Midcap 150 was up 1.8%, Smallcap 250 up 2.6%, and Microcap 250 climbed a full 5.5%. Large and micro caps ended up moving in almost opposite directions – a gap of roughly 6.6 percentage points.

1-month returns by market-cap segment, August 2026

IT and Telecom Led. Power and FMCG Didn’t.

Average sector index return, August 2026

Where the money went

Mid & Smallcap IT & Telecom+6.6%

Capital Goods+5.4%

Telecommunications+4.7%

Metal+3.8%

Consumer Services+3.8%

Where it didn’t

Power-7.5%

FMCG-6.3%

Media-3.7%

Cement-3.4%

Hospitals-3.2%

Mid & Smallcap IT & Telecom topped the table this month. IT’s strength looks like a continuation of a move that started in July, when the sector staged a sharp recovery on better-than-feared earnings — that bottoming-out process appears to have carried into August
Telecom’s gain looks tied to a pickup in AI-driven capex spending, along with expectations of an industry-wide tariff hike
Capital Goods, Metal and Consumer Services rounded out the top five, with Metal also benefiting from a broader rebound in commodity prices. One outlier within that: Welspun Corp which landed a large pipe supply order from a US facility
FMCG’s fall looks tied to two pressures at once: input costs rising – inflation creeping back in India and globally, already visible in bond yields and commodity prices – combined with weakening brand pricing power that’s made it harder for companies to pass those costs on to consumers

The Rupee Stopped Falling. Has It Actually Stopped?

USD/INR hit an all-time high of 96.8 on May 20, 2026, driven by trade tensions, sustained FPI outflows and an oil-price spike
It pulled back through June, briefly retested those highs in mid-to-late July, and settled into a narrower 95.1-95.8 band through August
RBI’s special FCNR(B) swap facility pulled in $127.2 billion in inflows before the window closed on August 31 (total inflows across RBI’s three swap schemes: $136.4 billion)

USD/INR daily, May 1 – Aug 31, 2026

Watch this month:The Fed’s September 15-16 FOMC decision, and whether RBI needs to intervene again now that the FCNR(B) window has closed