During the week, as many as 103 smallcap stocks have delivered double-digit negative weekly returns with four of them falling over 25%.
Kopran Ltd was the top loser in the smallcap pack with 26% decline, followed by Globus Spirits (-23%), Antony Waste (-21.7%), and BASF India (-21.1%).
About 98 stocks including CE Info Systems, Tanfac Industries, RK Swamy, Greaves Cotton, Hitachi Energy, Motisons Jewellers, IIFL Capital Services, Valiant Organics, Raju Engineers, Suraj Estate Developers among others have dropped between 10-20% during the week.
Only 8 smallcap stocks gained in double-digits in the reporting period with Pix Transmissions and JSW Holdings being the top gainers.
In the midcap segment, no stocks delivered double-digit returns, but around five stocks fell 10% or more. Bayer CropScience, Tube Investments, Relaxo Footwear are the top losers, while Uno Minda, Biocon and Ramco Cements bucked the bearish trend with leading gains.Among the Sensex pack, IT companies stayed resilient with Infosys topping the charts, followed by HCL Tech, which rose at 1% and Tech Mahindra, whose shares gained by a quarter percentage.
What should investors do?
Analysts said a spike in domestic CPI inflation to a 14-month high of 6.2%, a firm dollar index, and a rising US 10-year yield signal that the volatility will continue in the short term.
“Investors are rushed to unwind their positions in the riskier assets as the continuity of the premium valuation without a fair earnings growth will not be sustained,” said Vinod Nair, Head of Research at Geojit Financial services.
Going ahead, the focus will be the developments from the Trump administration and its implications towards the emerging markets.
“We factor a 2 to 3% downward revision in the Nifty EPS estimate for FY25. Amid a setback in H1FY25, investors see some light in H2FY25 earnings on account of acceleration in government spending, a good monsoon, and a revival in rural demand. Consolidation may continue in the near term; however, the beaten-down value stocks may witness bottom fishing due to their potential outlook,” Nair added.
Technically, the index, on a daily scale, has formed a Doji candle near its 200-Days exponential moving average (DEMA) support indicating uncertainty. The 200-DEMA is placed around 23,540.
“A bounce is likely, but it should be seen as an opportunity to sell. If Nifty breaks below the 200-day EMA, selling pressure could intensify. The index has support at 23,450, with resistance expected at 23,650, framing the short-term trading range,” said Rupak De of LKP Securities.
(With data inputs from Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
