Moneycontrol

Budget 2021

Associate Partners:

  • SMC
  • Samsung
  • Volvo

Moneycontrol

Budget 2021

Associate Partners:

  • SMCSamsungVolvo
Webinar :Join an expert panel for a webinar on Smart investments for a secure retirement January 28, 2021. Register now!

Carnage in broader markets; over 200 stocks in the small-cap space down 10-40%

In the coming truncated week we expect the index to consolidate in the broad range of 9000-7800 amid stock-specific action with elevated global volatility

March 28, 2020 / 09:45 AM IST

What a week for Indian markets! Bulls tried to make comeback but failed. And although they helped pare some losses towards the closing of the week in the benchmark indices, we cannot say the same for the broader markets.

The S&P BSE Sensex fell 0.3 percent while the Nifty50 was down by 0.97 percent for the week ended March 27, but the big carnage was seen in the broader market space where the S&P BSE Small-cap index was down 6.09 percent, and the S&P BSE Mid-cap index plunged 5.4 percent in the same period.

As many as 230 stocks in the S&P BSE Small-cap index gave negative returns in the range of 10-40 percent. These include names such as Indiabulls Ventures, Jindal Saw, Alok Industries, Simplex Infrastructure, Future Consumer, PNC Infra, Pennar Industries and Steel Strips among others.

Note: Here are the top 60 names out of 230 stocks in the Small-cap index that fell 10-40 percent for the week ended March 27. 

BSE 500 index 28 March

Close

COVID-19 Vaccine

Frequently Asked Questions

View more
How does a vaccine work?

A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

How many types of vaccines are there?

There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

What does it take to develop a vaccine of this kind?

Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

View more
Show

More than 160 stocks in the S&P BSE 500 index fell 10-30 percent, including names such as Future Consumer, Lemon Tree, Credit Access, KRBL, Future Retail, Welspun India, Bajaj Finserv, and NCC among others.

It was an eventful week for Indian markets with a flurry of stimulus packages from central bankers across the world. The United States government also gave a nod to the $2 trillion packages which was signed by the US President Donald Trump on March 27 and back home, a flurry of stimulus measure were announced by Finance Minister Nirmala Sitharaman and the Reserve Bank of India (RBI) Governor Shaktikanta Das.

The government is trying to address the problem of slowdown which looks imminent. The commentary from the RBI was positive as it assured investors that the central bank is ready to take any measures whenever the situation arises.

The bounce back is encouraging but experts advise not to mistake it with a ‘reversal’. As long as the Nifty50 holds 7,511 which was the swing low March 24, things are likely to stay on the upside, however, a breach of the same could lead to further profit-taking.

"After the US’ $2 trillion stimulus, a whopping 9.5 percent of its GDP, Germany granted 21.1 percent of its GDP as a stimulus, and China granted 2.8 percent, India’s stimulus quantum looks small, but nonetheless is arriving in piecemeal packets regularly,” Jimeet Modi, Founder & CEO, SAMCO Securities & StockNote said in a note.

"While these are temporary steroids for the economy, nobody can estimate the intensity of the pain that this pandemic and lockdown is going to befall upon our economy and businesses," he said.

Modi further added that earnings contraction in the next two quarters is certainly a given with tourism, airlines, hotels, metals, retail outlets not under essential goods getting impacted the most, and investors must not mistake this bounce as a sharp rally, but a normal correction which will face selling pressure at higher levels.

Technical Outlook:

Equity benchmarks continue to trade with high volatility as Nifty during the previous week oscillated in a 1,500 points range and closed marginally lower by 1 percent at 8,660 to extend the decline for a six consecutive week.

The broader markets relatively underperformed as the Nifty mid-cap and small-cap lost 7 percent and 8 percent, respectively. The weekly candle suggests that the selling pressure might just be abating, and the index could consolidate in the coming week.

"The weekly price action resembles thrusting line bull candle indicating abating downward momentum, as Nifty posed a strong pullback after holding 7,500 mark twice during the week, as prices approached deep oversold trajectory after 40 percent decline from all-time high (12,430)," Dharmesh Shah, Head – Technical, ICICI direct told Moneycontrol.

"Going ahead in the coming truncated week we expect the index to consolidate in the broad range of 9,000-7,800 amid stock-specific action with elevated global volatility aiding the index to bring some stability in the market," he said.

Shah further added that a retracement towards 8,000-7,800 (80 percent retracement of last week’s gain) should be utilised as an incremental buying opportunity.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Kshitij Anand is the Editor Markets at Moneycontrol.

stay updated

Get Daily News on your Browser
Sections