Over 40 smallcap stocks gain between 10-40% as Sensex logs third straight weekly gain; RailTel among gainers

On the stock-specific front, RailTel Corporation of India, Data Patterns, Force Motors, Jubilant Industries, Kalyani Steels, Tata Investment, Greenply Industries, Indo Count, Zen Technologies, Newgen Software, Schneider Electric Infra, and others are among the smallcaps that logged a double-digit rise in their share prices last week.

Also Read: Dividend Stocks: Marico, Sanofi India, among others to trade ex-dividend next week; check full list

Markets’ Weekly Print

The Indian equity indices witnessed a volatile week, ultimately extending their winning streak for a third consecutive week to achieve a new all-time high. The Nifty and Bank Nifty indices rose by nearly 0.75 per cent and 11.5 per cent respectively, closing the week at 22,419.55 and 48,636.45. The market capitalisation of BSE-listed companies reached its all-time peak of ₹394.06 lakh crore.

Initially, the Nifty prices dropped to as low as 21,860.65, the lowest level since February 15. However, bargain hunting emerged from these lower levels, driven by several positive fundamental factors. These include India’s gross domestic product (GDP) growth for the third quarter of the fiscal year 2023-24, which exceeded expectations at 8.4 per cent compared to the estimated 6.7 per cent

A resurgence of buying interest from foreign investors who injected nearly Rs. 23.5 crore into the cash segment. Notably, foreign institutional investors (FIIs) transitioned from being net sellers to buyers, while domestic institutional investors (DIIs) continued to lead the market with purchases amounting to Rs. 8,268 crore.

On the sectoral front, all sectoral indices ended higher except Media, Pharma and IT. Additionally, the backdrop of an improving global market and a respite in the US personal consumption expenditures (PCE) inflation reading provided further support to the market.

Market analysts noted that banking stocks reversed initial weakness to perform well on the back of an improved economic outlook, while weakness persisted in the IT and pharma sectors, which are more closely tied to the global economy.

Also Read: FPIs turn net buyers in February, infuse ₹1,539 crore in Indian equities; Will inflows sustain in March?

“At the onset of a week laden with economic data releases, investor sentiment appeared cautious. However, indices surged in the final session, propelled by stellar GDP figures and a healthy performance in the manufacturing sector as output and new order picks up. While robust economic data boosted confidence in the economy, concerns lingered regarding the RBI’s policy decisions amidst high liquidity and inflation worries,” said Vinod Nair, Head of Research, Geojit Financial Services.

‘’On the global front, in-line US personal consumption expenditure data and benign Euro zone inflation may influence global central banks to take a dovish view on interest rates. US bond yields dipped after the inflation data release, also supporting the equity market,” added Nair.

Previous Session

Nifty 50 and Sensex ended higher in a special session conducted today (March 2), for stock exchanges to test a failsafe system for equity trading. The blue-chips indexes logged new record highs on the back of gains in metal stocks, extending their previous day’s sharp rally amid impressive GDP data and foreign fund inflows. The special live trading session had an intra-day switch over from Primary Site (PR) to Disaster Recovery (DR) site. 

Equities traded in two special sessions from 9:15 am to 10:00 am via the primary site, and then from 11:30 am to 12:30 pm through the DR site as exchanges tested how their systems would respond in the case of unexpected events. It was done to  check preparedness to handle major disruption or failure at the primary site.

Capital markets regulator Securities and Exchange Board of India (SEBI) had scrutinised NSE and BSE in the wake of a major trading outage in February 2021 due to a telecoms glitch, when the bourses failed to migrate to the DR site. Special trading session is part of the framework for the Business Continuity Plan (BCP) and Disaster Recovery Site (DRS) management system.

“Trading members are requested to note that the exchange will conduct a special live trading session with intra-day switch over from Primary Site (PR) to Disaster Recovery Site (DR) on Saturday, March 2, in equity and equity derivatives segments,” BSE and NSE said in separate circulars.

In the second part of the special live trading session, the 30-share BSE Sensex ended flat by 60.80 points at 73,806.15 level while the Nifty 50 closed at 22,378.40 level, up 39.65 points or 0.18 per cent. On the broader market front, the Nifty Small Cap 100 gained 0.69 per cent and the Nifty Midcap 100 was up by 0.74 per cent.

During today’s session, the benchmark reached its record peak of 73,994.70, up 249.35 points or 0.33 per cent. The Nifty went up by 39.65 points or 0.18 per cent to settle at a new closing high of 22,378.40. During the day, it hit the lifetime peak of 22,419.55, up 80.8 points or 0.36 per cent.

The broader, more domestically focussed small- and mid-caps rose 0.69 per cent and 0.74 per cent respectively, outperforming the blue chips. Small- and mid-caps had underperformed blue chips over the last week, dropping 0.72 per cent and one per cent, on concerns over flows into the segments.

Metals climbed 1.58 per cent, led by Tata Steel, which added 3.60 per cent, after rising about 6.5 per cent on Friday on block deals. Tata Steel and Hero MotoCorp were the top two Nifty 50 gainers by percentage. Equities will resume normal trading on Monday.

‘’Despite the sharp rally, volatility cannot be ruled out due to ongoing concerns like delay in rate cuts, conflicts in the Middle East and expensive valuations of local stocks. The upsurge shows that investors are willing to place bullish bets on Indian stocks amid continuity in economic policies and robust investment climate,” said Prashanth Tapse, Senior VP (Research), Mehta Equities Ltd.

Also Read: Oil reports weekly gain as traders await OPEC+ quarterly supply decision; Brent settles 2% higher at $83/bbl
 

Where are markets headed?

Geojit’s Vinod Nair said that the release of additional data from the US, such as PMI and payroll data, along with inflation data from China, may influence market dynamics moving forward. ‘’Corrections in mid- and small caps are underway and expected to continue, with regulators urging disclosure of associated risks to AMCs,” said Nair.

‘’We expect ongoing momentum to continue while taking cues from a fresh set of economic data next week. For next week sectors to be in focus Auto on the back of better-than-expected monthly sales numbers. Cement and metals are also expected to be in focus on the back of stronger economic growth, while defence and solar sector on account of improved order visibility,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services Ltd.
 

Technical View: ‘’Although the overall sentiment remains positive, the index must surpass the 22,400 mark to trigger a new rally. A decisive breakthrough above 22,400 could propel the index towards 22,600. On the downside, support is situated at 22,250-22,200,” said Rupak De, Senior Technical Analyst, LKP Securities.

‘’We are eyeing 22,800 in Nifty now thus participants should continue with a ‘buy on dips’ approach until it breaks 21,900. We feel the participation of the banking pack would continue to play a critical role in maintaining the prevailing momentum while others may play a supportive part on a rotational basis. Traders should maintain stock-specific approach and prefer index majors and large midcap counters for long trades,” 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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Published: 02 Mar 2024, 09:59 PM IST