Small-cap index slides, top gainers surge up to 29% amid market volatility

Market This Week

Among the broader market indices, smallcaps underperformed midcaps and the main indices amid heightened volatility, driven by geopolitical tensions, rising crude oil prices, and sustained selling by FIIs.

Among the broader indices, the BSE Smallcap index declined 0.5 percent, while the BSE Midcap index advanced 0.35 percent and the BSE Largecap index gained 0.4 percent during the week.

This week, the BSE Sensex added 187.95 points, or 0.22 percent, to finish at 82,814.71, while the Nifty50 rose 100.15 points, or 0.39 percent, to close at 25,571.25.

Sectoral performance remained mixed during the week. The Nifty PSU Bank index rose 5.5 percent, while the Nifty Energy index gained 2.4 percent and the Nifty FMCG index added 1.7 percent. The Nifty Pharma, Healthcare, and Defence indices advanced around 1 percent each. However, the Nifty Auto, IT, and Media indices declined between 1.3 and 2.5 percent during the period.

"Market sentiment remained volatile during the week, oscillating between caution and optimism. Strong buying interest in banking, financials, power, and select FMCG counters helped absorb the impact of persistent global uncertainties. Steady asset quality, stable credit growth, and clearer progress on trade discussions reinforced confidence in the domestic macro environment," said Vinod Nair, Head of Research, Geojit Investments.

"In contrast, IT stocks remained subdued as concerns around AI-led disruption and margin pressures weighed on investor confidence. Escalating geopolitical tensions between the US and Iran, coupled with a sharp rise in crude oil prices and uncertainty surrounding the US Fed’s rate-cut trajectory, briefly sparked broad-based selling. Despite these challenges, resilience in large caps, selective sectoral flows, and optimism around India’s participation in Pax Silica ensured that the market ended on a positive bias," Nair added.

"The market will closely monitor the developments between the US and Iran, crude oil price movements, and global monetary signals. Although volatility may stay elevated, strong domestic macro fundamentals and a supportive demand environment are expected to provide a cushion."

"The release of India’s GDP data next week will be keenly watched for its implications on earnings momentum and broader market positioning. Overall, markets are likely to trade within a range, with liquidity flows and global developments shaping short-term movements," he added.

Foreign Institutional Investors (FIIs) extended their selling for the second consecutive week, offloading equities worth ₹637.68 crore during the period. In contrast, Domestic Institutional Investors (DIIs) continued their buying streak, purchasing equities worth ₹6,883.81 crore.

The BSE Smallcap index shed 0.5 percent during the week, with stocks such as Aqylon Nexus, Filatex Fashions, Transworld Shipping Lines, Zaggle Prepaid Ocean Services, Stallion India Fluorochemicals, SEPC, Shoppers Stop, and Pennar Industries declining between 16–22 percent. On the other hand, VL E-Governance and IT Solutions, Novartis India, RACL Geartech, KRN Heat Exchanger and Refrigeration, Godfrey Phillips India, Aeroflex Industries, Netweb Technologies India, Jyoti Structures, Newgen Software Technologies, Sadhana Nitrochem, and Jindal Poly Investment and Finance Company gained between 16 and 28 percent.

Where is the market headed?

Rupak De, Senior Technical Analyst at LKP Securities

Over the next few days, higher volatility can be expected, with the index likely to oscillate in the 25,300–25,800 range. Immediate support is placed at 25,500, while immediate resistance is seen at 25,650."

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

The market is likely to consolidate next week, tracking the geopolitical development along with the signing of the India-US trade deal, India Q3 GDP data, US initial Jobless claims, and the conclusion of the AI summit.

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.