These smallcaps gain between 10-33% in volatile week

Market This Week

The broader indices gave mixed performance in the volatile last week ended on November 28 with BSE smallcap index finished with no change, while midcap index rose more than 1 percent, outperforming the main indices.

In this week, BSE Sensex index rose 474.75 points or 0.55 percent to end at 85,706.67and Nifty50 jumped 134.8 points or 0.51 percent to end at 26,202.95.

For the month November, BSE midcap ended on flat note, largecap index jumped 1.4 percent and smallcap index shed more than 3 percent, underperforming the main indices as BSE Sensex and Nifty rose 2 percent each.

For the week, Foreign Institutional Investors' (FIIs) sold equities worth Rs 3659 crore, while Domestic Institutional Investors (DII) continued their buying as they purchased equities worth Rs 22,762.62 crore.

However, FIIs continued their selling on the fifth consecutive month as they sold equities of Rs 17,500.31 crore in this month. On the other hand, DIIs extended their buying in 28 straight months as they purchased equities of over Rs 77,000 crore.

On the sectoral front, BSE PSU Bank, Private Bank, Metal, Financial Services, Information Technology, Healthcare added 1 percent each, while BSE Oil & Gas, Telecommunications shed 1 percent each.

"Indian equities navigated a highly eventful week characterised by alternating phases of volatility and resilience, ultimately closing the week on a positive note. Benchmark indices briefly scaled record highs before witnessing profit booking at elevated levels. Global cues remained supportive, aided by softer US yields, renewed expectations of a Fed rate cut, and benign crude prices that helped temper inflation concerns," said Vinod Nair, Head of Research, Geojit Investments.

"Despite early pressure from a weakening rupee and continued FII outflows, sentiment improved mid-week as robust domestic inflows and increasing confidence in forthcoming Fed policy easing rekindled buying interest, driving a broad-based market rebound. Gains were led by Pharma, PSU Banks, Media, and IT, while Realty, Consumer Durables, and Oil & Gas lagged behind," he added.

"Domestically, the stronger-than-expected Q2 GDP print, driven by resilient manufacturing, solid construction activity, and healthy private consumption, is set to support sentiment in the near term."

"Investors will now focus on a critical lineup of macro data, including India and U.S. PMI releases, U.S. core PCE inflation, initial jobless claims, and, crucially, the RBI’s policy decision," he said.

"With robust GDP momentum and improving credit growth providing a solid backdrop for earnings acceleration in H2, the medium-term outlook remains positive. However, pockets of short-term volatility may persist, influenced by global cues and central bank policy announcements," Nair added.

The BSE Small-cap index ended on flat note. Best Agrolife, Bigbloc Construction, 63 Moons Technologies, VLS Finance, Fischer Medical Ventures, JSW Holdings, Hazoor Multi Projects, Spectrum Electrical Industries, Nectar Lifesciences, Lumax Auto Technologies rose between 15-34 percent. On the other hand, Magellanic Cloud, Worth Investment & Trading, Antelopus Selan Energy, Ceinsys Tech, Blue Cloud Softech Solutions, Stallion India Fluorochemicals, VTM, Kernex Microsystems (India), Suratwwala Business Group, Allcargo Logistics, Transformers and Rectifiers India, Chennai Petroleum Corporation, Apex Frozen Foods, Oswal Pumps fell between 10-51%.

Where is Nifty50 headed?

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities

Technically, this market signal continuation of choppy movement in the market after a stellar rally of Wednesday. After the formation of long bull candle on Wednesday, Nifty showing a narrow range movement over the last couple of sessions signal possible uptrend continuation pattern.

The underlying uptrend of Nifty remains intact. The present choppy movement could eventually result in another round of sharp breakout soon in the market. The near term upside target to be watched around 26600 and immediate support is placed at 26050.

Rajesh Bhosale, Equity Technical Analyst, Angel One

It was an action-packed week. The first half reflected weakness as prices slipped below the 25850 mark. However, on Wednesday, the sentiment flipped sharply, with renewed buying interest pushing Nifty beyond the 26300 mark. The momentum thereafter cooled off, and the last two sessions remained subdued. Eventually, Nifty ended the week with gains of around half a percent, closing tad above the 26200 mark.

After waiting for more than 14 months, Nifty has finally recorded a fresh new high. However, despite this milestone, there was no major celebration on the street, as markets continued to consolidate around the 26300 zone. Importantly, this week, prices defended the 20 DEMA and formed a higher bottom.

The key highlight was Wednesday’s strong bullish candle, followed by consolidation near its upper end, indicating a time-wise correction and a likely continuation of the uptrend in the coming sessions. Going ahead, the midpoint of Wednesday’s bullish candle around 26000 is likely to act as immediate support, while the lower end of the candle near 25850 marks a strong structural base, coinciding with the previous week’s low. On the higher side, once Nifty sustains above 26300, we expect the index to witness broad-based buying momentum and head towards 26500 – 26700 levels in the near term.

Traders are advised to keep a tab on the above levels and continue with the buy-on-dip approach, while avoiding contra bets of going short.

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