Active Stocks
Fri May 24 2024 15:59:27
  1. Tata Steel share price
  2. 174.80 -0.37%
  1. NTPC share price
  2. 374.85 0.68%
  1. State Bank Of India share price
  2. 828.60 -0.45%
  1. ITC share price
  2. 436.10 -1.16%
  1. Power Grid Corporation Of India share price
  2. 318.50 -0.39%
Business News/ Markets / Stock Markets/  Over 30 smallcap stocks gain between 20-70% even as Sensex logs worst week since November; do you own?
BackBack

Over 30 smallcap stocks gain between 20-70% even as Sensex logs worst week since November; do you own?

Domestic equity benchmarks Nifty 50 and Sensex have fallen about 1.3 per cent each over the three sessions in the holiday-truncated week, culminating in a second consecutive week of losses, primarily driven by weakness in the banking sector.

Frontline indices have fallen about 1.3 per cent each over the three sessions this holiday-truncated week.Premium
Frontline indices have fallen about 1.3 per cent each over the three sessions this holiday-truncated week.

As many as 30 smallcap stocks logged a double digit rise in their stock prices - in the range of 20-70 per cent last week, outperforming the 30-share BSE Sensex which logged its worst performance since the week ending October 27, dragged by information technology (IT) stocks.

On the stock-specific front, IFCI, Mangalore Chemicals, Rail Vikas Nigam Ltd, MTNL, Borosil Renewables, HFCL, MSP Steel and Power, RailTel Corporation, JK Tyre & Industries, NBCC (India), Oswal Greentech, IFB Industries, Andrew Yule, and others are among the smallcaps that logged a double-digit rise in their share prices last week.

Markets' Weekly Print

Domestic equity benchmarks Nifty 50 and Sensex have fallen about 1.3 per cent each over the three sessions this holiday-truncated week, culminating in a second consecutive week of losses, primarily driven by weakness in the banking sector.

The high-weightage financials led the losses for a second straight week, adding 1.6 per cent to their 4.1 per cent drop last week that was sparked by HDFC Bank reporting disappointing margins. 

Also Read: Dividend Stocks: Havells India, Siemens, MRPL, Metro Brands, others to trade ex-dividend next week; check full list

In the six sessions since then, foreign funds have sold Indian shares worth 34,766 crore, pulling the Nifty 50 down about three per cent. On the weekly front, the BSE benchmark fell by 982.56 points or 1.37 per cent, and the Nifty declined 269.8 points or 1.24 per cent.

Analysts said that the truncated trading week witnessed heightened market activity and volatility. A sharp cut in the index at the beginning pushed the bulls on the back foot however resilience in the select heavyweights capped the damage. Profit booking affected several midcap and smallcap stocks, though certain sectors exhibited resilience, according to analysts.

Foreign institutional investors (FIIs) also emerged net sellers for all sessions last week with a total divestment of 12,194.38 crore, while domestic institutional investors bought for all sessions with a total investment of 9,701.46 crore. The substantial net sales by FIIs has exceeded Rs. 35,000 crore in the Indian equity market this month.

‘’Anticipation of the Fed policy meeting next week, likely retaining the existing rate, triggered increased US bond yields and FII selling in the market,'' said Vinod Nair, Head of Research, Geojit Financial Services.

Notably, the PBOC’s 0.5 per cent cut in the reserve ratio, aimed at stimulating growth and financial liquidity, provided short-term support to the domestic market this week, according to Nair. PBOC is short for People's Bank of China.

Previous Session

The frontline indices resumed their downward march on Thursday, January 25, on losses led by select banking and IT heavyweights, including HDFC Bank, Tech Mahindra and TCS. Dimming hopes for an early rate cut by the US Fed have pushed investors to secure profits amid lacklustre December quarter earnings. 

Additionally, foreign portfolio investors (FPIs) drove away from Indian stocks. These combined factors contribute to the ongoing volatility in the market. The session's volatility could also be attributed to the expiry of January futures and options (F&O) contracts. 

Nifty 50 pared losses and settled 101 points, or 0.47 per cent, lower at 21,352.60, while Sensex nded 360 points, or 0.51 per cent, lower at 70,319.04. Mid and smallcaps outperformed the benchmarks. While the BSE Midcap index ended with a loss of 0.36 per cent, the Smallcap index bucked the trend and ended with a gain of 0.54 per cent.

‘’The broader market is unable to hold gains due to high valuations, subpar results, and persisting geopolitical tension in the Middle East, followed by an F&O expiry weighing down the market,'' added Nair.

Also Read: FPIs turn net sellers in January, offload 24,734 crore in Indian equities: Why did they snap buying streak?

Where are markets headed?

Prashanth Tapse, Senior VP (Research) at Mehta Equities underscored that the market is witnessing a lot of volatility ahead of the Budget with a negative bias as investors further booked profits to cut down their long positions on the expiry day. He also added that FPI outflow, rising bond yields and mixed earnings are some of the other factors which are keeping investors nervous.

Technical View: Rupak De, Senior Technical Analyst at LKP Securities underscored that the sentiment may continue to lean towards the bears as the Nifty struggled to surpass the 21,500 mark, where call writers held substantial positions.

"Looking ahead, the trend is likely to remain sideways, fluctuating within the range of 21,300 and 21,500. Nevertheless, a decisive breakthrough above 21,500 could propel the index towards 21,700/22,000 in the short term," said De.

‘’On the technical front, with the immediate resistance being at 21,400 mark, we expect the market to go down further towards 21,100 and 21,000 eventually, and if it breaks 21000 level we can witness more selling pressure up to 20,900-20,500 levels. Any trend change would happen only once the Nifty surpasses the 21,500 mark,'' added Tapse.

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.

You are on Mint! India's #1 news destination (Source: Press Gazette). To learn more about our business coverage and market insights Click Here!

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.
Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 27 Jan 2024, 09:33 PM IST
Next Story footLogo
Recommended For You
GENIE RECOMMENDS

Get the best recommendations on Stocks, Mutual Funds and more based on your Risk profile!

Let’s get started