76 smallcap stocks fall 10-93% as market resumes selling in week after budget

After shares rebounded in the budget week, the market resumed selling in the following week ended February 11 amid volatility due to RBI policy announcement, state elections, possibility of faster Fed rate hike, continued FIIs selling, and rising crude oil prices.

In the week, BSE Sensex shed 491.9 points (0.83 percent) to end at 58,152.92, while the Nifty50 fell 141.5 points (0.80 percent) to close at 17,374.8 levels.

Among sectors, BSE Capital Goods index shed 3.8 percent, Realty index fell 2.7 percent and FMCG index slipped 2.2 percent. However, Metal index added 3.8 percent.

Broader indices underperformed main indices with BSE Midcap index shedding 2 percent and Smallcap index falling 3.4 percent.

As many as 76 smallcap stocks lost 10-93 percent including Forbes Gokak, Solara Active Pharma Sciences, GE Power India, Stove Kraft, Diamines and Chemicals, Fairchem Organics, Lasa Supergenerics, Jubilant Industries, Jaypee Infratech, Goldiam International, Gulshan Polyols and Gati.


On the other hand, Shankara Building Products, Zee Media Corporation, DB Realty, Gujarat Narmada Valley Fertilizers & Chemicals, Seamec, Schneider Electric Infrastructure, Omaxe, Butterfly Gandhimathi Appliances and Mahindra Lifespace Developers gained up to 32 percent.

“Domestic equities swung between gains and losses in this week’s volatile session driven by aggressive FII selling, RBI policy meeting, US inflation data and the upcoming state elections. Though the investors expected the RBI to moderate its policy tone, the central bank surprised the market with a super dovish statement by maintaining its accommodative stance, modest inflation forecast and GDP growth of 7.8% in FY23,” said Vinod Nair, head of research at Geojit Financial Services.

“However, US inflation surged 7.5% on an annual basis with the consumer price index for all items rising 0.6% in January, fuelling fears of a hawkish rate hike by the central bank. Net purchases by the DIIs is pumping slight optimism into the market which is countered by heavy FII selling.

“The direction of the market in the week ahead will be determined by cues from global markets while domestic macroeconomic data and corporate earnings will continue to remain in focus in the near term,” he added.

BSE Midcap index shed 2 percent dragged by Torrent Power, Endurance Technologies, Tata Power Company, Kansai Nerolac Paints, 3M India, Crompton Greaves Consumer Electrical, ABB India, Zee Entertainment Enterprises and Bayer CropScience.

The BSE 500 index declined more than 1 percent dragged by Solara Active Pharma Sciences, Mahindra Logistics, Balaji Amines, Torrent Power, Deepak Fertilizers and Petrochemicals Corp, Hitachi Energy India, Jubilant Pharmova, Quess Corp, Birla Corporation, Suzlon Energy, BASF India, Zydus Wellness, TCNS Clothing and Tanla Platforms.

“D-Street experienced wild swings and ended the week in red as the participants baked in the possibility of a faster than expected Fed rate hike given the soaring US inflation. Globally, markets have been remained turbulent since the start of the year and this volatility was extended to this week as well,” said Yesha Shah, head of equity research, Samco Securities.

Where is Nifty50 headed?

Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services:

Domestic markets have been closely following global movements with Nifty consolidating within the narrow range of 17,200-17,600 for the last couple of days. With the earning season ending on 15 Feb, the focus will shift back to global cues. Volatility is expected to remain elevated in the near term with record high inflation and the US Fed board meeting scheduled on Monday. Interest rate sensitives, metals and select pharma stocks are likely to remain in focus next week.

Amol Athawale, Deputy Vice President – Technical Research, Kotak Securities:

The Nifty took support near 17050 but failed to sustain above the 20 day simple moving average (SMA) which is broadly negative. Technically, the index is witnessing non-directional activity near the 50 day SMA. However, on daily and weekly charts, it is holding higher bottom formation but at the same is consistently facing resistance at 20 day SMA. Hence, the market is likely to maintain non directional activity in the near future.

The immediate support for the Nifty would be 17300-17250 while 17600 and 17700 would act as a crucial hurdle for the bulls. Meanwhile, after a short term correction the Bank Nifty held the level of 20 day SMA.

The structure suggests 38200 or 20 day SMA and 38000 would be the sacrosanct support for the index, and above the same uptrend momentum is likely to continue till 39500-40000.

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.

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