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Midcaps underperform in a volatile week, but these 24 smallcaps rise 10-24%

Last week, BSE Sensex ended 0.30 percent lower at 52,975.8, while the Nifty50 was down 0.42 percent to close at 15,856 levels.

July 24, 2021 / 01:27 PM IST

Indian market ended marginally lower in a truncated week amid mixed cues and rising concerns over Delta variant of COVID, but better earnings from India Inc capped losses.

Last week, BSE Sensex ended 0.30 percent lower at 52,975.8, while the Nifty50 was down 0.42 percent to close at 15,856 levels.

S&P BSE Midcap index ended lower by 0.47 percent, while BSE Smallcap index ended flat in the week ended July 23.

As many as 24 stocks in the S&P Smallcap index rose 10-24%. These include Jindal Stainless, Usha Martin, Schaeffler India, Brightcom Group, Ramco Industries, Indiabulls Real Estate, Datamatics Global Services, 63 Moons Technologies, Apollo Pipes and Godawari Power & Ispat among others.

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"Markets traded volatile in the prevailing consolidation range and finally settled marginally lower. The concern over the global economic recovery due to the rise in Delta variant COVID cases was weighing on the sentiment initially. Besides, the beginning of earnings season has also not been very encouraging so far further adding to the pressure," said Ajit Mishra, VP Research. Religare Broking.

"However, the benchmark indices managed to pare losses significantly in the following sessions, thanks to healthy buying in sectors such as IT, FMCG and realty," he added.

"We expect volatility to remain high due to the scheduled derivatives expiry of July month contracts," Mishra said.

BSE 500 index also lost 0.37 percent dragged by the Vodafone Idea, Venkys, Just Dial, Infibeam Avenues and South Indian Bank, while gainers were Jindal Stainless, JSW Energy, Schaeffler India, Indiabulls Real Estate, Jindal Stainless (Hisar), Caplin Point Laboratories and Jubilant Foodworks.

"Markets started on a weak note imitating agitated global cues but it did not last long as sentiments took a U-turn by the latter half of the week. Despite concerns on stretched valuations and inflation, the Street currently seems to be obsessed with IPOs and how the subscriptions have hit the roof at pricey multiples," said Nirali Shah, Head of Equity Research, Samco Securities.

"The outlook remains bullish as long as we trade above 15600 levels. Any break below the said support will signal weakness in the short term," she added.

Where is Nifty50 headed?

"15800 will be an important support level in the short-term perspective. If the market breaches the level of 15900 and is able to sustain above this level, the market expects to gain momentum, leading to an upside projection of 16200 levels," said Ashis Biswas, Head of Technical Research at CapitalVia Global Research.

"The momentum indicators like RSI and MACD to stay positive and market breadth to improve, further strengthening a short-term bullish outlook," he added.

Technically, Nifty formed a Doji on the daily scale while forming a bullish hammer candle on the weekly scale which indicates that declines are being bought but follow up is missing at higher zones.

"In the coming week, markets will first react to results of three majors Reliance Industries, ITC and ICICI Bank on Monday whose weightage in Nifty is ~20%," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services.

"Now, it has to hold above 15800 zones to witness an up move towards 15962 and 16000 levels while on the downside support exists at 15750 and 15700 levels," Khemka said.

Disclaimer: The views and investment tips expressed by experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.
Rakesh Patil
first published: Jul 24, 2021 01:27 pm

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