These 50 smallcap stocks log double-digit rise as Sensex settles marginally higher on volatile week; do you own?

As many as 50 smallcap stocks logged a double digit rise in their stock prices - in the range of 12-40 per cent last week, as the 30-share BSE Sensex ended October's second week with a modest gain of 0.5 per cent after five days of volatile sessions over geopolitical concerns arising on the Israel-Hamas conflict.

Domestic benchmark equity indices slipped in the negative territory on Friday, October 13, session despite some intraday recoveries. In the last hour of the trade, index heavyweight stocks such as HDFC Bank, Kotak Mahindra Bank, State Bank of India, and Axis Bank witnessed major selling dragging down the benchmark indices.

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Nifty 50 lost 42.95 points to settle at 19,751.05. The Sensex falls 125.65 points to close at 66,282.74. Further, information technology stocks also weighed on the market sentiment on the backdrop of US inflation worries. Tata Consultancy Services (TCS) (+0.87 per cent), Infosys (-2.23 per cent) and HCL Tech (+2.64 per cent) flagging concerns of slower growth weigh on sentiments.

Despite the fall on Friday, the benchmarks logged weekly gains of nearly 0.5 per cent each, due to a relief rally earlier in the week on easing US bond yields and dovish comments from US Federal Reserve officials.

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While India's September retail inflation eased to a three-month low of 5.02 per cent, the rise in US consumer prices dragged global stocks. "India has clearly stood out in terms of macroeconomic fundamentals, managed to contain inflation better than developed markets" Pramod Gubbi, the founder of Marcellus Investment Managers said.

On the global front, the recent US inflation statistics reinforced bets on Federal Reserve rate hikes, which caused Treasury rates to spike higher and the Asian stock advance to pause. More pessimism was brought about by the most recent report showing China's economy is still sluggish.

On the stock-specific front, as many as 50 smallcap stocks logged gains in the range of 12 per cent - 40 per cent last week, outperforming the index. SpiceJet, Shalimar Paints, Omaxe, MOIL, PNB Gilts, Welspun Corp, Mahindra Holidays, Hitachi Energy, Phoenix Mill, Kalyan Jewellers, Quickheal Teachnologies, are among the smallcaps that logged a double-digit rise in their share prices last week.

“Domestic equity markets returns were in the positive territory this week despite some global concerns like elevated global interest rates, geopolitical unrest in the Middle East and continued stress in the Chinese real estate sector. Sensex and Nifty and the BSE Midcap and the BSE Smallcap indices saw gains this week. Amongst sectors, BSE Realty, BSE Metals and BSE Energy posted healthy gains during the week,'' said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

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Where are markets headed?

Market participants noted considerable stock-specific action in mid and small-cap stocks. The segments appear bullish and present a compelling opportunity for investors to explore options, many of which are available at attractive valuations, according to analysts.

"We remain bullish on Indian equities. Huge potential in market. Lot of inflows coming in and we expect this consolidation will be good opportunities for investors. Lot of stocks specific action in mid and small cap stocks. Mid and small cap stocks are looking extremely bullish. Excellent opportunity to grab them and many are available at dirt cheap prices,'' said Varun Aggarwal, founder and managing director, Profit Idea.

However, the slowdown in IT sector continues to weigh on frontline indices. Analysts also extend caution over some stocks and management on risky assets.

‘’The recent dip in IT majors combined with the underperformance of the banking pack is currently weighing on the sentiment. And, it is difficult to make any directional move without their participation. We thus reiterate our view to stay focused on stock selection and risk management,'' said Ajit Mishra, SVP - Technical Research, Religare Broking.

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