Mumbai: In the week that wiped off Rs 4 lakh crore of market capitalisation on Dalal Street, investors still managed to make some money in the midcap and smallcap stocks.
In the midcap segment, 51 stocks gave positive weekly returns, and in the smallcap segment, the number stood at about 375.
The major gainers in the broader market include
, , , , , , , , , , and . These stocks have registered 6-26% gains on a weekly basis.
Abbott India, REC, and Power Finance Corporation also scaled their 52-week highs.
Shares of Power Finance Corp and
have gained momentum amid the hope that they will make their entry into the MSCI global index in the February review.
Brokerage Nuvama Wealth sees these two stocks as strong candidates for entering into the MSCI index based on trading patterns.
PFC stock has seen a strong build-up of long positions in the derivative segment. Since the expiry of the December derivative series, the stock has gained 14% and hit an over-five-year high of Rs 160.80 on Friday. If the stock manages to cross Rs 170 and trades above that level, it will become eligible to enter into the MSCI index.
Similarly, Bank of Baroda shares are trading comfortably above the global market-cap cut-off levels, which favours its entry into the MSCI index.
The S&P Midcap and Smallcap indices, however, ended negative on a week-on-week basis, because losers outnumbered gainers.
But the 0.5% fall in these indices was lesser than the 1.5% fall in benchmark Sensex.
What should investors do?
Some technical analysts see it as a positive sign when the trend for benchmark indices remains negative.
“In case of recovery (in the market), the broader end of the spectrum would outperform heavyweights, and we would probably then witness a beginning of the pre-budget rally,” said Sameet Chavan, chief analyst – technical and derivatives at Angel One.
Although the risk-reward in some of the stocks in the midcap and smallcap segments remain favourable, market expers recommend trading cautiously with strict stop losses.
“In the near term, the markets seem to be running into a few headwinds – record high valuation premium to EMs, which may attract some tactical shifts to other EMs, potential slowdown in exports on the back of global slowdown, and fixed income emerging as a viable investment option,” said Milind Muchhala, executive director at Julius Baer India.
(Data inputs from Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
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