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Small & mid-caps outperform! Over 40 stocks in BSE500 index rose 10-40% in a week

Technically, the 15550 and 15400 levels would be major supports for Nifty and on the higher side 15800, 16000 and 16200 would be major levels to arrest the bull run, suggest experts.

June 05, 2021 / 09:12 AM IST

A historical week for Indian markets. Nifty50 touched a fresh record high of 15733.60 on Friday but Sensex is still less than 1 percent away from its current peak of 52,516.

The macro data dominated the price action. The Street reacted to the release of Q4 GDP data, PMI data, and RBI’s MPC announcement. Fall in coronavirus cases also boosted the sentiment.

The S&P BSE Sensex rallied 1.3 percent while the Nifty50 was up 1.5 percent for the week ended June 4, but the big action was seen in the small & midcap indices that rallied more than 3 percent each.

The S&P BSE Midcap index rose 3.9 percent while the S&P BSE Smallcap index closed with gains of 3.3 percent for the week ended June 4.

“Small & midcap space witnessed consolidation during March-April. However, they moved out of the consolidation much ahead of the Nifty,” Gaurav Ratnaparkhi, Head of Technical Research, Sharekhan by BNP Paribas said.

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“For the last several weeks, the broader market is seeing a strong rally that is supported by various technical parameters. Structurally, these indices are forming wave extension on the upside, which means that the rally is here to stay,” he added.

There are as many as 41 stocks in the S&P BSE 500 index that gained 10-40% in just 5 trading sessions. These include names like Voltas, Oberoi Realty, Jindal Saw, Indian Overseas Bank, Adani Power, Bank of Maharashtra, Suzlon Energy, and PNB Housing among others.

BSE 500 5 June

Sectoral Outlook:

On a weekly basis, buying was seen in realty, energy, consumer durables, and oil & gas while IT and private banks saw muted performance this week.

The S&P BSE Realty index rose 6.6 percent in a week with Mahindra Lifespace Developers and Oberoi Realty hitting fresh highs.

The Cabinet on June 2 approved the Model Tenancy Act for circulation to the States/Union Territories for adoption. It will facilitate the unlocking of vacant houses for rental housing purposes.

It is expected to give a fillip to private participation in rental housing as a business model for addressing the huge housing shortage.

“Realty has been a late entrant to the bull party, nevertheless it has come in strong. Robust Q4 sales numbers driven by low-interest rates, liquidity & reasonable rates have indicated strength in the sector,” Nirali Shah, Head of Equity Research, Samco Securities said.

“This has propelled confidence among retail investors to plunge into the real estate sector,” she added.

Technical Outlook:

The Nifty50 index closed the week at 15,670 and formed a bullish candle on the weekly chart for the third consecutive week - a mark of strength.

In the coming week, global cues could dominate the market. And, on the domestic front, manufacturing and industrial production data for the month of April on June 11 are some key economic data points to watch out for.

Amid fall in COVID cases and pick up in the vaccination program, the trend will remain to be on the upside as long as Nifty50 stays above crucial support placed at 15400, suggest experts.

“Technically, the 15550 and 15400 levels would be major supports for Nifty and on the higher side 15800, 16000 and 16200 would be major levels to arrest the bull run,” Shrikant Chouhan, Executive Vice President, Equity Technical Research at Kotak Securities said.

“The basic trend of the market is bullish but in the absence of domestic flows, our markets would start following the global cues, which are mixed and sensitive to the pace of inflation,” he said.

In the coming week, Chouhan said that global cues could dominate the market, and for the week the strategy should be to buy on dips between 15550/15450 with a final stop loss at 15350 levels. The focus should be on Auto, Insurance, Commodities, and technology companies.

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.
Kshitij Anand is the Editor Markets at Moneycontrol.

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