Over 50 smallcap stocks gain between 15-50% as Sensex logs best week in 2024; do you own?

On the stock-specific front, NBCC (India), HCC, IRB Infra, Shakti Pumps, Punjab & Sind Bank, KPI Green Energy, Tata Investment, Andrew Yule, Infibeam Avenues, Man Industries, Indian Bank, PTC Industries, Jaiprakash Power, Zen Technologies, SpiceJet, UCO Bank, Orient Green Power, and others are among the smallcaps that logged a double-digit rise in their share prices last week.

Markets’ Weekly Print

Markets rebounded after spending two weeks in a corrective phase and gained around two per cent, led by favorable cues. The tone was positive for most of the week citing favorable global cues and buying in select heavyweights however underperformance of banking majors continues to weigh on the sentiment.

Also Read: Nifty February series outlook: 4 stocks where investors can park their money; do you own?

Frontline indices logged their best week this year so far, led by large-cap stocks like Reliance Industries, which logged its best week since June 2022. On the weekly basis, the BSE benchmark jumped 1,384.96 points or 1.95 per cent, and the Nifty climbed 501.2 points or 2.34 per cent.

“Large-caps like Reliance and HDFC Bank have come to the fore in this leg of the rally,” said Saurabh Jain, assistant vice president of research for retail equities at SMC Global. The allocations could shift further towards the segment from small- and mid-caps as investors seek safety in an expensive market, according to analysts.

The BSE benchmark declined 106.81 points or 0.15 per cent to settle at 71,645.30 on Thursday when the finance minister presented Interim Budget 2024 in the Parliament. The Nifty 50 dipped 28.25 points or 0.13 per cent to 21,697.45 on February 1. 

The government’s adherence to its fiscal consolidation roadmap and thrust on capex are positive for bonds and the impact on equities has been as expected, said Abhishek Goenka, founder and CEO of IFA Global. The gains in mid-caps last week were capped by Paytm shares nosediving 20 per cent for the second day in a row, since the central bank ordered its banking arm to stop taking fresh deposits.

Foreign institutional investors (FIIs) were buyers for three out of five sessions last week with a total divestment of ₹2,008.68 crore, while domestic institutional investors bought for all sessions with a total investment of ₹10,102.62 crore, according to stock exchange data.

The US Federal Reserve announced its interest rate decision last week, after a two-day Federal Open Market Committee (FOMC) meeting, and unanimously voted to leave the benchmark interest rates unchanged at 5.25 per cent – 5.50 per cent for the fourth straight meeting, in line with Street estimates.

“A conservative interim budget had no slowdown effect on the market, which continued to grow on the pre-election rally. The drastic fall in the fiscal deficit target is leading to a reduction in bond yields, which will lead to lowering of corporate borrowing costs, increasing incentives to step up investment. Furthermore, the FOMC tempers expectations that the central bank will soon slash interest rates and that inflation in the US is continuing to cool,” said Vinod Nair, Head of Research, Geojit Financial Services.

Previous Session

Domestic equity benchmarks Nifty 50 and BSE Sensex experienced robust buying during intraday trading, concluding the day with substantial gains in the previous session, propelled by the performance of heavyweights in the energy and IT sectors, such as Reliance Industries, Infosys, TCS, Power Grid, and NTPC.

The domestic market witnessed across-the-board buying amid positive global cues while experts observed that the pro-growth Interim Budget 2024 also influenced investors to buy quality stocks after the recent correction.

The Sensex settled at 72,085.63, up 440 points, or 0.61 per cent on Friday and is still 1,342 points down from its all-time high of 73,427.59 which it hit on January 16, 2024. BSE Midcap and Smallcap indices hit their fresh all-time highs of 39,140.16 and 46,169.7 respectively, during the session.

Nifty 50 jumped two per cent during the session to hit its fresh all-time high of 22,126.80, however, the index cooled off and closed with a gain of 156 points, or 0.72 per cent, at 21,853.80 on February 2. Nifty 50 ended the month of January little changed, after rising nearly 14 per cent in the last two months of 2023.

Reliance and Infosys — two of the five heaviest-weighted Nifty stocks — jumped about two per cent each on the day. The broader and more domestically focussed small- and mid-cap sub-indexes rose 0.93 per cent and 0.37 per cent, respectively.

‘’Nifty has retested its record high after consolidating for two weeks but we feel it is early to assume that we are set for the next leg of the up move. It needs sustainability above 22,150 to march towards 22,500+. Besides, consistency in the participation from the banking majors is also critical for a steady trend else the range-bound trend would continue. Traders should focus more on stock selection in the present scenario and maintain positions on both sides,” said Ajit Mishra, SVP – Technical Research, Religare Broking Ltd.

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: 03 Feb 2024, 10:13 PM IST