Over 25 smallcap stocks gain between 20-65% as index hits record-high; Balaji Telefilms, UCO Bank among gainers | Mint
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Business News/ Markets / Stock Markets/  Over 25 smallcap stocks gain between 20-65% as index hits record-high; Balaji Telefilms, UCO Bank among gainers
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Over 25 smallcap stocks gain between 20-65% as index hits record-high; Balaji Telefilms, UCO Bank among gainers

The broader, more-domestically focused small-caps closed flat, while mid-caps added 0.85 per cent for the week

On the weekly front, the BSE benchmark declined 490.14 points or 0.67 per centPremium
On the weekly front, the BSE benchmark declined 490.14 points or 0.67 per cent

More than 25 smallcap stocks logged a double digit rise in their stock prices - in the range of 20-65 per cent last week, with the benchmark BSE Sensex logging a marginal weekly decline. However, the broader S&P BSE Smallcap index hit its fresh record high last week at 46,821.39, driven by gains in stocks such as Olectra Greentech, Balaji Telefilms, Jaiprakash Power in the last five days.

On the stock-specific front, Schneider Electric Infra, UCO Bank, Balaji Telefilms, Parag Milk Foods, Olectra Greentech, Punjab & Sind Bank, Triveni Turbine, Bajaj Hindusthan Sugar Limited, EIH Ltd, SMC Global, ASM Technologies, Kalyani Steels, Kriti Industries, Kirloskar Oil, Indiabulls Real Estate Ltd, and others are among the smallcaps that logged a double-digit rise in their share prices last week.

Markets' Weekly Print

Markets traded lackluster in a range and settled with a marginal cut, in continuation to the prevailing consolidation phase of markets. After the muted start, Nifty 50 oscillated on both sides, tracking mixed trends in the heavyweights across sectors. 

Also Read: Dividend Stocks: Nestle India, Power Grid, ONGC, among others to trade ex-dividend next week; check full list

The sectoral moves kept the traders busy wherein pharma, energy, and realty performed well while pressure continued in FMCG and banking. The broader indices also traded mixed and midcap managed to gain nearly a per cent, according to market experts.

"When valuations are high, the bears will use any negative news to drag the market down," said Dr VK Vijayakumar, chief investment strategist at Geojit Financial Services, referring to "slightly hawkish comments" from the Reserve Bank of India (RBI) governor on Thursday.

The RBI kept interest rates unchanged on Thursday, as expected, and signaled rate cuts may not be imminent. The BSE benchmark fell by 723.57 points or one per cent to settle at 71,428.43 on Thursday amid uncertainty about the timing of interest rate reduction after the RBI policy decision. The Nifty declined by 212.55 points or 0.97 per cent to 21,717.95.

On the weekly front, the BSE benchmark declined 490.14 points or 0.67 per cent, and the Nifty dipped 71.3 points or 0.32 per cent. The broader, more-domestically focused small-caps closed flat, while mid-caps added 0.85 per cent for the week. Both indexes logged their worst session in more than two weeks on Friday.

Among individual stocks, fintech major Paytm declined most throughout the week, down 45 per cent since January 31, when the RBI ordered its banking arm to stop business. Financials stocks shed 1.13 per cent for the week. They have dropped roughly six per cent since January 16, when top private lender HDFC Bank posted disappointing quarterly results. 

Consumer stocks dropped 2.27 per cent for the week, led by a 5.7 per cent drop in heavyweight ITC, which posted its worst week since October 2021. Information technology (IT) stocks, however, added one per cent for the week after resilient services and labour market data raised hopes of a soft landing for the US economy -- a key source of revenue for the sector.

Oil & gas stocks added about four per cent for the week, helped by sustained post-results rally in oil marketing companies like Bharat Petroleum Corporation Ltd (BPCL) and Hindustan Petroleum Corporatio Ltd (HPCL).

Foreign institutional investors (FIIs) were buyers for three out of five sessions last week with a total divestment of 5,871.45 crore, while domestic institutional investors also bought for three sessions with a total investment of 5,325.76 crore, according to stock exchange data.

‘’Mid and small caps had witnessed strong rallies over the past few months thus making valuations a little stretched. However, buying was seen in large caps where there is still some comfort,'' said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

Previous Session

Domestic equity benchmarks Sensex and Nifty 50 ended in green on Friday's session led by by buying in financial, fast-moving consumer goods (FMCG), and pharma stocks. Investors were still processing the fact that there was less chance of early rate cuts in the US and India. Further, a recent surge in oil and gas stocks has resulted in a selloff, and metal stocks too have witnessed selling.

The 30-share BSE Sensex ended higher by 167.06 points or 0.23 per cent at 71,595.49 level while the Nifty 50 closed at 21,782.50 level, up 64.55 points or 0.3 per cent. On the broader market front, the Nifty Midcap 100 ended 0.89 per cent lower today, while the Nifty SmallCap 100 closed 1.40 per cent lower. 

"After a volatile session, the market ended on a positive note, aided by a rebound in banking stocks after yesterday’s sell-off. Mid- and small-cap indices bled the most as the sentiment on the broader indices remains vigilant due to their rich valuation. Caution prevails in the market ahead of the release of US, UK, and Indian inflation data next week, while the US 10 yr yield is inching higher," said Vinod Nair, Head of Research, Geojit Financial Services.

Also Read: ONGC Q3 Results: Net profit drops 10% to 10,356 crore, revenue down 2% YoY; dividend declared

Where are markets headed?

‘’Post the hawkish commentary from the US Fed and RBI and their focus on bringing inflation under control, next week's inflation data would be important data to watch out for. We expect the market to turn cautious and consolidate in the near term amid key macro data to be announced and the last leg of Q3 results,'' said Motilal Oswal's Khemka.

Going ahead, analysts expect the consolidation to continue in the Nifty and banking holds the key for the next directional move as other key sectors have done their part. A decisive break above 22,150 in Nifty and 47,000 in banking could only fuel the fresh momentum while the 21,200-21,450 zone would offer support, in case the profit taking resumes. 

‘’On the sectoral front, we reiterate our preference for IT, metal, pharma for long trades and expect a cool-off in the others, especially the PSU pack. Traders should continue with stock-specific approach and prefer a hedged approach,'' said Ajit Mishra, SVP - Technical Research, Religare Broking.

Disclaimer: The views and recommendations above are those of individual analysts, experts and broking companies, not of Mint. We advise investors to check with certified experts before making any investment decisions.

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ABOUT THE AUTHOR
Nikita Prasad
Nikita covers business news and has been producing news on digital platforms since 2018. She writes on economy, policy, markets, commodities, industry. Her core areas of interests include infrastructure, energy, oil and gas, railways, and transport/mobility. She has worked for business news channels like Moneycontrol, NDTV Profit, and Financial Express in the past. If you have story ideas/pitches/reports or quotes/views to share, reach her at nikita.prasad@htdigital.in.
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Published: 10 Feb 2024, 09:23 PM IST
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