Smallcap stocks tumble up to 46% as broader indices snap two-week winning streak

For the week, the BSE Sensex index fell 722.43 points or 0.86 percent to finish at 83,216.28, and the Nifty50 shed 229.8 points or 0.89 percent to end at 25,492.30.

Broader indices lost between 0.6-1.5 in the volatile week ended November 7, with mid and smallcap indices snapping two-week gains, while laregcap index extended the fall in the second week amid mixed earnings from India Inc and persistent FII selling.

For the week, the BSE Sensex index fell 722.43 points or 0.86 percent to finish at 83,216.28, and the Nifty50 shed 229.8 points or 0.89 percent to end at 25,492.30.

The Foreign Institutional Investors (FIIs) sold equities worth Rs 1,632.66 crore, while the Domestic Institutional Investors (DIIs) bought equities worth Rs 16,677.94 crore.

Most of the sectoral indices ended in the red with the Nifty Media index shedding 3.2%, the Nifty Defence index falling 2%, the Nifty Metal index declining 1.7%, the Nifty IT index shedding 1.6%; however, the Nifty PSU Bank index gained 2%.

"Indian equity markets ended on a negative note amid the absence of fresh domestic catalysts and continued FII outflows. Select sectors found support from upbeat Q2 earnings, with PSU banks remaining in focus due to robust financial performance, improving asset quality, and renewed speculation regarding a potential FDI cap hike and sector consolidation. However, IT and metal stocks came under pressure, weighed down by weak global cues and fading expectations of a Fed rate cut," said Vinod Nair, Head of Research, Geojit Investments.

"On the global front, investor sentiment remained cautious amid uncertainty surrounding trade and tariff discussions. Domestically, PMI readings were mixed, while GST collections remained resilient despite rate rationalization—indicating sustained economic momentum and optimism around corporate earnings upgrades. Meanwhile, gold has declined from its recent highs owing to a stronger U.S. dollar and easing geopolitical tensions."

"Going ahead, market direction will depend on upcoming domestic inflation data, FII flows, developments related to the U.S. government shutdown, and progress in trade negotiations involving the U.S., India, and China. A buy-on-dips strategy appears prudent, as results from most Nifty 50 companies reported so far have been largely in line with estimates, and continued policy support is expected to support current premium valuations and potentially drive earnings upgrades," he added.

The BSE Small-cap index fell 1.5 percent. Worth Investment & Trading, Fischer Medical Ventures, Stallion India Fluorochemicals, Reliance Infrastructure, Bliss GVS Pharma, Utkarsh Small Finance Bank, VL E-Governance and IT Solutions, Reliance Power, and  Punjab Chemicals & Crop Protection shed between 15-46 percent. On the other hand, Thangamayil Jewellery, LG Balakrishnan and Brothers, Interarch Building Solutions, CCL Products India, BLS E-Services, ASM Technologies, Raghav Productivity Enhancers, IRIS Business Services, Privi Speciality Chemicals, Orchid Pharma, Dredging Corporation India, and Redington added between 15-56 percent.

The underlying short-term trend of the market continues to be weak, but the medium-term remains bullish. Nifty is expected to slide down to the crucial role reversal support of 25500-25400 levels in the near term before bouncing back from the lows. Hence, one may look for a buy on dips opportunity. Immediate resistance is placed at 25800.

Looking at the broader backdrop, the index has been declining since forming a double top around 26,100 on the hourly timeframe. Recently, the index slipped below a critical moving average, setting a deeper bearish tone.

The crucial resistance is placed at 25,600; as long as it remains below this level, sentiment may continue to favor a sell-on-rise strategy. On the lower end, support is placed at 25,400, and a fall below this level might further boost the bears’ morale.