Midcap 100, Smallcap 100 index down 1%; MRF, Biocon, Swiggy at 52-week lows

Yes Bank, PI Industries, MRF, Swiggy, Biocon, NMDC, Tube Investments of India, Vishal Mega Mart, Voltas and Max Financial Services from the Midcap 100 index hitting their respective 52-week lows.

Even as the benchmark indices quoted higher, the broader market was under pressure on Wednesday with the Nifty Midcap 100 and Nifty Smallcap 100 index down 1 per cent each on the National Stock Exchange (NSE) amid a sharp sell-off in power, cables and defence-related stocks.

 

At 10:25 AM, the Nifty Midcap 100 and Nifty Smallcap 100 index were down 1 per cent and 1.35 per cent, respectively. In comparison, the Nifty 50 was up 0.21 per cent. Midcap 100 and Smallcap indices were down 10 per cent and 7.5 per cent, respectively,  from their 52-week highs.

 

Apar Industries, United Spirits, Meesho, APL Apollo Pipes, Hindustan Copper, Yes Bank, Indian Renewable Energy Development Agency (IREDA), Tata Communications and Billionbrains Garage Ventures (Groww) from the Midcap 100 index were down 3-5 per cent.

 

 

Himadri Speciality Chemical, Gallant Ispat, TD Power & Systems, MTAR Technologies, Manappuram Finance, Sterlite Technologies, Emmvee Photovoltaic Power, Jyoti CNC Automation and Cholamandalam Financial Holdings from the Smallcap 100 index slipped between 4-7 per cent. Check - TOP GAINERS NSE | TOP LOSERS NSE 

 

Meanwhile, Yes Bank, PI Industries, MRF, Swiggy, Biocon, NMDC, Tube Investments of India, Vishal Mega Mart, Voltas and Max Financial Services from the Midcap 100 index hit their respective 52-week lows. KEC International, NBCC, Sammaan Capital, ITI and GMDC from the Smallcap 100 index also touched their respective 52-week lows.

 

According to ICICI Securities, volatility is expected to remain elevated ahead of the US midterm elections. In the process, a key level of support for the Nifty is placed at its recent panic low of 22,200, coinciding with the 200-week EMA at 22,380. Therefore, maintaining a stock-centric approach and focusing on companies with strong earnings remains crucial. Only a breach below 22,200 would lead to extended correction.

 

The Indian market had lagged its global counterparts due to AI-driven momentum. However, the recent sell-off in global AI-driven stocks fuelled by concerns about Fed interest rate hikes and financing of AI investments, could serve as a supportive tailwind for the growth-oriented Indian market, potentially attracting FII’s in the near future.

 

Unlike the benchmark, the broader market showed limited participation and failed to close above its previous week’s high. For the sustainability of the current rally, broader market participation will be essential. Midcap and small cap index closing decisively above the previous week’s high would be the first indication of a broadening of the rally, said ICICI Securities.

 

Meanwhile, with Brent crude prices and US bond yields remaining elevated, the market is likely to remain under pressure. The sell on rally market construct will continue in the near-term. However, the improving earnings growth, fair valuations of large-caps, and strong domestic liquidity will support the market on declines. Since the two large laggard sectors - IT and banking- have performed well in Q2 and are attractively valued, further corrections in these sectors will be met with strong domestic institutional investor (DII)-led accumulation, said V K Vijayakumar, Chief Investment Strategist, Geojit Investments.

 

Since the Q2 results season has started on a positive note and some positive surprises are likely in the broader market, market action, going forward, will be more stock-specific and results-sensitive. Despite the external headwinds, this is a stock picker’s market now, said V K Vijayakumar. Disclaimer: Views and outlook in this report belong to the brokerages and analysts cited. They do not reflect the views of Business Standard. Readers are advised to exercise discretion.