The shares of several smallcap companies dropped in morning trade on August 28, pushing the broader market index down for the fifth consecutive session. This comes amid an overall downturn in the stock markets, after US President Donald Trump's 50 percent tariff on India took effect.
The Nifty Smallcap 100 index dropped more than 1 percent to stand at 17,325 in the morning. It later recovered some losses and was down half a percent to hover around 17,466, as seen at 10 am. Midcap index also accompanied, dropping more than 0.6 percent to extend losses for the second consecutive session.
US President Donald Trump's additional 25 percent tariff took effect yesterday (August 27), effectively taking import tax on Indian goods to as high as 50 percent. As stock markets were then closed on account of Ganesh Chaturthi, the impact of the tariffs can be seen today (August 28). India Vix, which measures volatility in the market, jumped more than 4 percent.
Top smallcap losers:
The shares of FirstCry-parent Brainbees Solutions were the top loser on the index, dropping nearly 3 percent to trade at Rs 365 apiece. Inox Wind, PG Electroplast, IndiaMART, Five-Star Business Finance and CreditAccess Grameen shares followed, dropping nearly 2 percent each.
International Gemmological Institute (IGII), Titagarh Rail Systems, IDBI Bank and PVR Inox shares fell around 1.5 percent each. Kaynes Tech, MCX, Sagility India, RITES, KEC International, Angel One, Radico Khaitan, Data Patterns, Garden Reach Shipbuilders & Engineers (GRSE) shares fell more than 1 percent each.
IIFL Finance, RailTel Corporation, CAMS, IRCON and other smallcap stocks fell around 1 percent each.
Top midcap losers:
Adani Total Gas (ATG) shares tumbled nearly 4 percent to trade at Rs 610 apiece. IRB Infrastructure, Bharti Hexacom and Max Healthcare Institute shares dropped more than 2 percent each.
SJVN, Vodafone Idea, Page Industries, Aurobindo Pharma, Prestige Estates, Bharat Dynamics (BDL), Cochin Shipyard, Torrent Pharma, Astral, Solar Industries, GMR Airports, Mazagon Dock Shipbuilders, Colgate Palmolive, Tata Tech and Hindustan Zinc shares fell over 1 percent each.
"The 50% tariff imposed on India which has already come into effect will weigh on market sentiments in the near-term. But the market is unlikely to panic since the market will view this high tariffs as a short-term aberration which will be resolved soon...The real challenge before the market is the high valuations and the tepid earnings growth. The strong pillar of support to the market is the aggressive buying by DIIs flush with funds. Any selling by FIIs will be easily neutralised by the aggressive buying by DIIs," said VK Vijayakumar, Chief Investment Strategist, Geojit Investments.
"In the near-term, with the export sectors facing headwinds, smart money will be chasing fairly valued domestic consumption themes. Investors can consider moving money from over-valued smallcaps to the safety of fairly valued largecaps with focus on domestic consumption," he added.
Also read: Our LIVE blog on stock market updates
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
