Broader Market Rally: 400 Smallcap Stocks Deliver Double-Digit Returns

Photo : Moneycontrol

During the first week of April in FY25, broader indices in the Indian stock market continued their outperformance from the previous financial year amidst a backdrop of mixed signals including geopolitical tensions, rising crude oil prices, FIIs selling, in-line RBI policy outcomes, and the likelihood of a delay in rate cuts by the Fed.

BSE Sensex saw a rise of 596.87 points, marking a 0.81 percent increase to close at 74,248.22, hitting a record high of 74,501.73. Similarly, Nifty50 index surged by 186.8 points, or 0.83 percent, ending the week at 22,513.70, reaching a new high of 22,619.

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The broader indices displayed robust performance, with the BSE Small-cap, Mid-cap, and Large-cap indices recording gains of 7 percent, 4 percent, and 1 percent, respectively. Notably, the Nifty Midcap 100 index crossed the 50,000 mark for the first time, reaching a new high of 50,152.35.

Among sectors, significant gains were observed in the Nifty Media index (up 6.7 percent), Nifty Metal (up 5.3 percent), Nifty PSU Bank (up 4.2 percent), and Nifty Realty index (up 4 percent).

Foreign institutional investors (FIIs) were observed selling equities worth Rs 3,835.75 crore during the period.

Vinod Nair, Head of Research at Geojit Financial Services, commented on the market's performance, noting a strong start to the new financial year with Mid & small caps leading with gains of 4 and 7 percent, respectively. However, towards the end of the week, volatility escalated due to surges in US bond yields and crude oil prices, coupled with escalating geopolitical tensions. Despite the RBI's policy meeting meeting expectations, concerns over food inflation and alerts of a heat wave dampened market sentiment.

In terms of individual stocks, 400 Small-cap stocks witnessed gains ranging from 10 to 52 percent. Notable gainers included Best Agrolife, Indraprastha Medical Corporation, OnMobile Global, EKI Energy Services, and Centrum Capital, among others. Conversely, some stocks witnessed declines, including Rama Steel Tubes, Kaynes Technology India, and Ashapura Minechem.

Regarding the future trajectory of Nifty50, technical analysts provided insights. Rupak De from LKP Securities indicated sideways movement in the index, with a crucial resistance level at 22,650, while Jatin Gedia from Sharekhan by BNP Paribas anticipated consolidation with an upside breakout expected. Ajit Mishra from Religare Broking advised maintaining a positive bias unless the Nifty drops below the 22,200 level.

In conclusion, while the market witnessed volatility amid mixed cues, experts recommended caution and careful stock selection in navigating the current scenario.