Market Ends Four-Week Rally, but 43 Small-Cap Stocks Gain 10-26%

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After four straight weeks of gains, the market remained subdued for the week ended November 18, ending the week slightly lower. For the week, the BSE Sensex shed 131.56 points or 0.21% to end at 61,663.48, while the Nifty50 shed 41 points or 0.22% to end at 18,307.7.

In the NSE’s sectoral index, Nifty PSU Bank rose 2.3%, and Nifty Bank rose 0.7%. On the other hand, Nifty Media fell 5.3%, Nifty Auto fell 2%, while Nifty FMCG and Energy fell 1.7% each. The BSE Midcap index fell 1.3%, the BSE Smallcap index fell 0.8%, and the BSE large-cap index fell 0.5%.

During the week, foreign institutional investors (FII) bought shares worth Rs 349.2 crore, while domestic institutional investors (DII) bought shares worth Rs 2,274.97 crore, making them net buyers.

The BSE small-cap index fell 0.8%, with Chemcon Specialty Chemicals, SMS Pharmaceuticals, Kopran, Gayatri Projects, Nureca, Ashiana Housing and Cressanda Solution down 15-22%.

On the other hand, Kamdhenu, Kirloskar Oil Engines, GOCL Corporation, Rail Vikas Nigam, Alicon Castalloy, Atul Auto, JTEKT India, Tanfac Industries, Timken India and Hindustan Construction Company surged 20-26%.

The BSE 500 lost 0.68% for the week. One 97 Communications (Paytm), Star Health & Allied Insurance Company, Sun TV Network, DCM Shriram, Deepak Fertilizers, Chalet Hotels, Restaurant Brands Asia, EIH and Thermax fell 10-13%.

On the other hand, Rail Vikas Nigam, Timken India, Ircon International, Housing & Urban Development Corporation, Redington, Indian Railway Finance Corporation, IFB Industries, IIFL Finance, Esab India, Indiabulls Real Estate, RHI Magnesita India and Union Bank of India rose 10-23%.

Markets will be looking forward to developments in Europe and statements from Fed officials on their future stance. While price pressures have receded, the retail inflation figures were too high, unnerving central banks, especially in the US and India.

Meanwhile, the prevailing view is that inflation may have peaked, and the central bank may still raise rates at a more modest pace.

As a result of the aggressive actions of the past few months, some signs of a slowdown in growth may soon emerge. Markets will focus on the trajectory of inflation and the actual numbers on official policy.

The market is indicating that the current consolidation may continue, and the Nifty should break decisively above the 18,450 level to regain strength.

The Nifty had a lacklustre week, finally posting a negative weekly close after four consecutive positive weeks. Short-term momentum indicators have been showing negative divergence, a sign of weakness, and price action is expected to follow.

Looking ahead, Nifty is expected to fall to 18100-18000 in the short term. On the upside, 18450 has always been the resistance level of the index, and the short-term will continue to be the upper limit. The broader market is expected to see deeper rate cuts in the near term.

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