Over 50 smallcap stocks rise 10-40% as Sensex hits lifetime high driven by IT shares; do you own?

A strengthening rupee and hectic buying on tech, realty and oil counters amid a mixed trend in global markets further bolstered sentiment, according to traders.

On the stock-specific front, Wardwizard Innovations, Network18 Media, Suven Life Sciences, Easy Trip Planners, DB Realty, MRPL, Trident, Olectra Greentech, Dish TV, Suzlon Energy, Thomas Cook India, Man Industries, Karnataka Bank, PNB Gilts,  and others are among the smallcaps that logged a double-digit rise in their share prices last week.

Also Read: FPIs invest ₹3,864 crore in Indian equities so far in January; Will inflows sustain in 2024?

Markets’ Weekly Print

Indian markets ended a two-week long consolidation phase and settled around the week’s high. Weak global cues triggered a subdued start however buying in the select heavyweights prompted some recovery in the middle.

On a weekly basis, the BSE benchmark jumped 542.3 points or 0.75 per cent, and the Nifty 50 climbed 183.75 points or 0.84 per cent. Nifty 50 is now just 100 points away from crossing another milestone of 22,000 zone.

The IT index jumped 5.14 per cent, logging its best session since October 8, 2020, to hit a 21-month high. Market leaders Infosys and Tata Consultancy Services (TCS) emerged as the primary catalysts behind the surge in the Sensex index, concluding as the top contributors.

A mixed trend continued on the sectoral front wherein IT, realty and energy were among the top performers while FMCG and banking ended lower. The broader indices also edged higher wherein the smallcap index gained over half a per cent. 

The rupee strengthened for the eighth consecutive session to settle with a gain of six paise to 82.95 against the US dollar on Friday, buoyed by the rally in domestic equity markets. Rising crude oil prices in the international market and a strong greenback overseas restricted the gain in the domestic unit, as per forex traders.

‘’Last week witnessed a remarkable performance in the Indian stock market, marked by fresh record highs in Nifty and Sensex, largely driven by the stellar performance of Reliance and IT stocks. Reliance saw a significant breakout after a multi-month consolidation, contributing to the positive sentiment,” said Santosh Meena, Head of Research, Swastika Investmart Ltd.

Previous Session

Frontline indices Sensex and Nifty 50 saw strong gains on Friday, January 12, primarily driven by the stellar performance of IT giants. Both key indices, along with the mid and smallcap indices hit fresh all-time highs during the session, fueled by an optimistic sentiment following the better-than-expected December quarter earnings of TCS and Infosys.

Infosys share price witnessed a notable surge of eight per cent while TCS share price rose 4 per cent. This positive momentum had a cascading effect on other IT stocks, leading to the Nifty IT index concluding over 5 per cent higher, with all 10 components ending in the green.

Sensex hit its fresh all-time high of 72,720.96 during the session before closing the day with a robust gain of 847 points, or 1.18 per cent, at 72,568.45. The Nifty 50 hit its fresh record high of 21,928.25 during the session and closed at 21,894.55, jumping 247 points, or 1.14 per cent. With this, both indices settled at their fresh closing peaks.

BSE Midcap index hit its fresh record high of 37,941.29 during the session. The BSE Smallcap index closed at 44,503.70, with a gain of 0.41 per cent, after hitting its fresh all-time high of 44,644.04 during the session.

Individual stocks saw heightened activity, presenting opportunities for traders and investors alike. Notably, domestic institutional investors played a pivotal role in driving the rally, with net purchases exceeding ₹6,800 crore, while foreign investors were net sellers with a total divestment of ₹3,900 crore.

Also Read: Oil hits 2024 high-mark as tankers avoid Red Sea after air strikes; Brent settles at $78/bbl

Where are markets headed?

In the coming week, market will take cues from Q3 results, inflation data, and US PPI data. HDFC Bank, HUL, Ultratech, ICICI Bank, Asian Paints, and several midcap companies will announce their Q3 results next week. Traders should expect stock-specific action. 

Since the choppiness remains high during the earnings, risk management plays a critical role irrespective of the market trend and traders should plan their trades accordingly, said analysts.

‘’In the near term, investors’ trade positions will be more inclined towards the upcoming result season; the overall forecast for earnings growth remains optimistic, projecting double-digit figures,” said Vinod Nair, Head of Research, Geojit Financial Services.

Technical View: Ajit Mishra, SVP – Technical Research, Religare Broking Ltd said, ‘’We are now eyeing 22,150 in Nifty however selective participation from banking could keep the momentum in check. We suggest focusing on other key sectors and using any pause or dip to accumulate quality names. Needless to say, the volatility would remain high due to earnings and mixed global cues so plan the overnight trades accordingly.”

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: 13 Jan 2024, 09:53 PM IST