Broader indices hit record high; 40 smallcaps give double digit return

The broader indices reached new record highs in the week ending August 30, though they underperformed compared to the main indices, which also surged to fresh all-time highs. This rally was fueled by positive global sentiment following the latest Jackson Hole meeting, where the outcome suggested a potential rate cut by the Federal Reserve in the upcoming September meeting.

During the week, the BSE Midcap index, BSE Largecap index and BSE Smallcap index added 1.5 percent, 1.3 percent, and 0.6 percent, respectively.

In this week, BSE Sensex hit a new high of 82,637.03 and ended 1.57 percent or 1279.56 points higher at 82,365.77. The Nifty50 index also touched a new high of 25,268.35 and closed 412.75 points or 1.66 percent higher at 25,235.9.

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Foreign institutional investors (FIIs) sold equities worth Rs 19,139.76 crore, however, Domestic Institutional Investors (DII) bought equities worth Rs 20,871.10 crore.

"The Nifty-50 Index and Sensex gained around 1.7% each in the past week, while the mid-cap index gained around 1.7% and small-cap index gained just 0.6% underperforming large-caps. Markets followed the bullish cues of global markets. US Fed Chair Jerome Powell’s statement in Jackson Hole signaling imminent rate cuts, as well as greater confidence in soft landing, helped prop up emerging markets, including India," said Shrikant Chouhan, Head of Equity Research, Kotak Securities.

The BSE Small-cap index rose 0.6 percent with Bhageria Industries, NIIT, Gujarat State Petronet, Goodluck India, Datamatics Global Services, Godfrey Phillips India, Globus Spirits, Tata Investment Corp, RPSG Ventures, Geojit Financial Services, Ram Ratna Wires, Kamdhenu, Vimta Labs, JM Financial, Quick Heal Technologies rose between 16-33.

On the other hand, losers were Nahar Poly Films, Cosmo First, Jindal Poly Films, Reliance Power, TruCap Finance, Ester Industries, Minda Corp, ION Exchange India, Rane Madras, Quint Digital, Uflex, Cressanda Solutions, Cochin Shipyard, RACL Geartech, among others.

Where is Nifty50 headed?

Rupak De, Senior Technical Analyst, LKP Securities

The market strength is likely to persist as long as the index stays above 25,000. A drop below this level could trigger a significant correction.

On the upside, the current optimism could drive the index towards 25,500 in the near term.

Jatin Gedia – Technical Research Analyst at Sharekhan by BNP Paribas

We shall continue to ride the upmove. On the upside, we expect the Nifty to target levels of 25500. On the downside, the crucial support base is placed at 25000 – 24900.

We shall continue to ride the upmove with a trailing stop loss mechanism.

Siddhartha Khemka, Head - Research, Wealth Management, Motilal Oswal Financial Services

We expect the market to continue its northbound journey with stock-specific action. Global macro data which will be released during the week will continue to provide cues to domestic equities. Sector-wise, Auto will remain in focus as OEMs will announce their monthly sales numbers.

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