The S&P BSE Sensex lost 1.2 percent while Nifty50 saw a decline of 1.6 percent for the week ended October 12 but the real carnage was seen in small & midcaps which plunged 10-30 percent in the same period.
As many as 25 stocks in the S&P BSE500 index plunged 10-30 percent for the week that ended on October 19 which include names like Indiabulls Housing Finance, Dewan Housing Finance, Indiabulls Real Estate, PNB Housing Finance, 8K Miles, Kwality, Dish TV, Avenue Supermarts, Yes Bank, Bandhan Bank etc. among others.
Weak global cues, trade war concerns, rise in crude oil prices, emergence of liquidity fears in NBFCs as well as NBFCs, along with weak macroeconomic data such as rise in inflation and fall in IIP, selling pressure from foreign investors, mixed results from India Inc., and hawkish commentary of US Federal Reserve all weighed on sentiment.
In the S&P BSE Small-Cap index Adlabs Entertainment slipped 20 percent, followed by Nutraplus India (down 19%), 8K Miles (down 18%), Mcnally Bharat (down 18%), Repro Home Finance (down 16%), Edelweiss Financial Services (down 15%) etc. among others.
In the S&P BSE Mid-cap index three stocks slipped 10-30% which include names like L&T Finance Holdings, Piramal Enterprises, and Indiabulls Housing Finance.
Indian markets witnessed heavy selling pressure near key resistance levels and eventually, it broke below 10,300 levels on an intraday basis. The Nifty50 slipped 1.6 percent for the week but closed above 10,300 levels at 10,303.
“Market was volatile on concerns of slowing world economy due to lingering trade wars between the US and China. The Nifty faced stiff resistance at 10700 as the rise in oil price and volatility in INR influenced investors to book profits,” Vinod Nair, Head of Research at Geojit Financial Services told Moneycontrol.
“The FOMC minutes released on Wednesday indicated that US policymakers will go-ahead with rate hike as early as December. Mixed earnings from the latest set of results and volatility in the global market were putting pressure on markets. FIIs flows are strained due to increased global bond yield and trade war worries, hence funds are shifting from non-dollar assets,” he said.
Foreign investors have pulled out more than Rs 18,000 crore from equity markets while from the debt front, they have sold over Rs 11,000 crore, according to SEBI data on Moneycontrol.com.
Foreign investors are concerned about the fast pace of increase in interest rates and trade war worries which is likely to slow down the world economy, suggest experts.
For the week, which will also see F&O expiry is likely to remain volatile. Next batch of earnings from India Inc., the ongoing liquidity crunch in NBFCs, concerns over upcoming state elections is likely to cap upside for markets.
It would be important to keep an eye on Asian Paints, Can Fin Homes, Bajaj Finance, Ambuja Cements, Bajaj Auto, Indigo, Kotak Bank, Bharti Airtel, Maruti Suzuki, Piramal Enterprise, Yes Bank, Dr Reddy’s and a few others for directional clues for the market.
“The current phase of range-bound movement is expected to continue the following week for the Indian bourses. With the froth in the companies beginning to fade away, going forward we believe no new low prices will be reached atleast in the short-term till expiry in Nifty,” Jimeet Modi, Founder & CEO at SAMCO Securities & StockNote told Moneycontrol.
“However, volatility will remain heightened due to the uncertainty in the macros because of rising fear of trade wars and oil impact globally. The short-term mood will be mainly guided by corporate results; therefore, investors are advised to be very selective in their purchases and avoid any leverage at this juncture,” he said.