These smallcaps gave double digit returns despite fall in Sensex, Nifty50

In this week, BSE Sensex index shed 444.71 points or 0.51 percent at 85,267.66, while Nifty50 index fell 139.5 points or 0.53 percent at 26,046.95

The broader indices performed in line with main indices falling 0.4 percent each and extended the losing streak for the second consecutive week amid consistent FIIs outflow, falling rupee, uncertainty over US-India trade deal.

In this week, BSE Sensex index shed 444.71 points or 0.51 percent at 85,267.66, while Nifty50 index fell 139.5 points or 0.53 percent at 26,046.95.

The Foreign Institutional Investors' (FIIs) offloaded equities worth Rs 9,201.89 crore, while Domestic Institutional Investors (DII) continued their buying as they bought equities worth Rs 20,184.70 crore.

Among sectors, Nifty Defence index shed 3 percent, while Nifty Media, Nifty PSU Bank, Nifty IT, Nifty FMCG fell between 1-1.7 percent. On the other hand, Nifty Metal index rose 2 percent and Nifty Consumer Durables added 0.4 percent.

"Indian equities opened the week on a subdued note, slipping below 26,000 amid caution ahead of the U.S. Federal Reserve policy decision, sustained FII outflows, continued rupee weakness, and uncertainty surrounding U.S.–India trade negotiations. Global risk-off sentiment was further heightened by rising Japanese bond yields and expectations of a BoJ rate hike in December. Sectoral performance was mixed, with being IT under pressure while PSU banks, real estate, and consumer durables witnessed selective buying," said Vinod Nair, Head of Research, Geojit Investments.

"Market sentiment improved sharply later in the week after the Fed announced a 25-bps rate cut, easing liquidity concerns and fuelling hopes of renewed FII inflows. With supportive central bank policies, steady domestic investments, and optimism over trade progress despite unclear timelines, benchmarks closed the week on a strong note."

"Looking ahead, markets are likely to maintain a positive bias but remain sensitive to rupee stability, FII flow trends, and clarity on trade agreements, alongside global cues from the BoJ, ECB, and BoE. Risks persist from currency fluctuations and global trade uncertainties; however, improving earnings visibility and liquidity support provide a constructive backdrop and downside protection," he added.

The BSE Small-cap index fell 0.4 percent with Refex Industries, Kothari Industrial Corporation, Hubtown, Bliss GVS Pharma, Jagatjit Industries, Websol Energy System, Fino Payments Bank, Deccan Gold Mines, Reliance Infrastructure slipping between 12-23 percent, while Fermenta Biotech, Stallion India Fluorochemicals, Rolex Rings, Sri Adhikari Brothers Television, Dolat Algotech, Transformers and Rectifiers India, Suratwwala Business Group, PRAVEG, Dredging Corporation India, Blue Cloud Softech Solutions, EFC (I) added between 16-26 percent.

Nifty on the weekly chart formed a small bear candle with long lower shadow. The similar candle pattern has been formed in the last two weeks, which signals an emergence of sharp buying in the market from near the immediate supports.

The underlying trend of Nifty continues to be positive. The next upside levels to be watched around 26300-26400. Immediate support is placed at 25900.

The bulls staged a strong comeback as Nifty advanced for the second consecutive session, closing above the 26,000 mark. Earlier in the week, the index took support near its 50-DMA at 25,720, rebounding firmly from that level, which is expected to remain a key support zone.

Nifty also moved above its short-term 21-DMA at 26,020, reinforcing the positive momentum. If Nifty manages to hold above the 26,000 level, a short-covering move toward 26,200–26,250 is possible in the coming week. Momentum indicators and oscillators continue to remain in buy mode on the weekly charts, signalling sustained strength. Meanwhile, the volatility index INDIAVIX has eased to the 10 level, a zone that remains supportive for bullish sentiment.

On the weekly scale, the index has formed a small red candle with a long lower shadow, indicating buying interest at lower levels. However, on the upside, 26,200 and 26,325 will act as stiff resistance levels in the short term.

On the downside, 25,700 will act as a crucial support level. As long as the index holds above 25,700, it is likely to consolidate within the 25,700–26,325 range in the short term.