SMIDs shine on easing West Asia tensions, advance 3%; BLS spurts 15%

In the smallcap segment, BLS International Services led the gains, quoting higher by 14.6 per cent

Bulls took charge of Dalal Street on Tuesday, March 24, with benchmark indices BSE Sensex and Nifty 50 surging over 2 per cent in intra-day trade, supported by easing geopolitical tensions in West Asia and softer crude oil prices.

 

The Sensex climbed 1,667 points, or 2.29 per cent, to an intra-day high of 74,363. The Nifty 50 advanced 513 points, or 2.28 per cent, to touch 23,026. Broader markets also joined the rally, with the Nifty Midcap100 index rising 3.03 per cent intra-day, while the Nifty Smallcap100 index gained 2.84 per cent on Tuesday.

 

Analysts attributed the rally to improved sentiment after US President Donald Trump announced a five-day pause on planned strikes on Iranian power plants following “productive conversations” with Tehran, even as Iran denied any direct talks. Additional support came from cooling crude oil prices, with Brent crude easing towards $100 per barrel from around $110 earlier.

 

 

“Following the sharp selloff after the eruption of war in the Middle East on February 28, the temporary five-day pause by the US has acted as a trigger for a relief rally, with crude prices retreating from recent highs of $113 per barrel,” said Sunny Agarwal, head of fundamental research at SBI Securities.

 

He noted that the rally in broader markets comes as a relief, with broad-based participation and the advance-decline ratio favouring gainers. 

Mid and smallcaps rally

 

Buying interest remained strong across the broader market during intra-day deals. At last check, the Nifty Midcap100 index was up 2.61 per cent at 54,095, while the Nifty Smallcap100 index rose 2.50 per cent to 15,476.

 

Among midcaps, Vishal Mega Mart led the gains, trading higher by 7 per cent. Others such as Tube Investments of India, GMR Airports, Mahindra & Mahindra Financial Services, Indian Bank, LIC Housing Finance, and HDFC Asset Management Company were trading higher by up to 5.8 per cent.

 

In the smallcap segment, BLS International Services led the gains, quoting higher by 14.59 per cent. Among others, JBM Auto, Five-Star Business Finance, HBL Engineering, Tejas Networks, Data Patterns (India), Deepak Fertilizers and Petrochemicals Corporation, and Karur Vysya Bank were trading with gains of up to 7 per cent. 

Analysts caution amid relief rally

Analysts, however, remain cautious despite the rally in the broader markets.

 

“The recent bounce in midcap and smallcap stocks may look positive at first glance, but the overall trend is still weak. Both indices have been in a downtrend for some time now, with a pattern of lower highs and lower lows. Even after today’s sharp move, prices are still below key moving averages, which suggests that the broader trend hasn’t really changed yet. Technically, this move looks more like a short-term relief rally rather than the start of a fresh uptrend,” said Ravi Singh, chief research officer at Master Capital Services.

 

According to Singh, the smallcap index is nearing a falling trendline resistance, while midcaps are still trading below their 50-day average. Momentum also does not appear very strong, indicating that the upside could remain limited from current levels.

 

“Given this setup, it makes sense to use the current bounce to reduce exposure. If stocks are close to your buying price or showing small gains, it is better to book profits or exit and lower risk. Fresh buying should be avoided for now, as another round of selling cannot be ruled out. For now, staying cautious and protecting capital is the smarter approach,” he added.

 

Echoing similar views, Hitesh Tailor, technical research analyst at Choice Broking, said the sharp bounce in Nifty Midcap and Smallcap indices indicates short-term relief after the recent correction, but the broader trend still reflects a phase of consolidation.

 

According to Tailor, the CNX Midcap, around 52,300, is holding near its immediate support of 52,000 after a 14–15 per cent retracement from its peak, suggesting profit-booking pressure is still at play. Similarly, CNX Smallcap, near 15,500, has taken strong support around 15,000, aligned with its 200-week EMA, which remains a key structural support zone. On the upside, resistance is seen around 16,700–17,200, where supply may emerge.

 

“Overall, while near-term stability may depend on improvement in geopolitical cues, the medium- to long-term outlook remains constructive. This correction phase should be viewed as an opportunity to gradually accumulate fundamentally strong stocks within the mid and small-cap space, rather than chasing sharp pullbacks,” said Tailor.

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(Disclaimer: The views and investment tips expressed by the analysts in this article are their own and not those of the website or its management. Business Standard advises users to check with certified experts before taking any investment decisions.)