These 50 smallcap stocks rise 10-30% as Sensex snaps 2-week losing streak; do you own?

As many as 50 smallcap stocks logged a double digit rise in their stock prices – in the range of 10-30 per cent last week, as the 30-share BSE Sensex ended October’s first week with a gain of 0.25 per cent, snapping its two-week losing streak. Domestic markets settled higher after the Monetary Policy Committee (MPC) of the Reserve Bank of India (RBI) maintained a status quo on repo rates and policy stance, in line with Street expectations.

The central bank also retained its policy stance as the “withdrawal of accommodation” with five out of six MPC members voting in favour of this. Apart from this, strong macroeconomic indicators and resilience imparted by domestic investors also boosted sentiments by the end of the volatile week.

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For the week, the Sensex rose by 0.25 per cent while the Nifty 50 inched up by 0.08 per cent. On the other hand, the BSE Midcap index fell 0.81 per cent this week while the Smallcap index moved up by 0.79 per cent.

On Friday, October 6, Nifty 50 closed at 19,653.50, up 108 points, or 0.55 per cent while Sensex closed 364 points, or 0.55 per cent, higher at 65,995.63. The BSE Midcap index rose 0.66 per cent while the Smallcap index ended 0.56 per cent higher.

Global cues were also positive after a pause in a bond market sell-off. The 10-year US bond yields were near 4.74 when the Sensex closed on Friday. The dollar was steady and looked set to end the week with gains.

On the stock-specific front, as many as 50 smallcap stocks logged gains in the range of 10 per cent – 30 per cent last week, outperforming the index. Suzlon Energy, MSP Steel & Power, Balaji Telefilms, HBL Power, Infibeam Avenues, Network 18 Media, Ashoka Buildcon, PNB Gilts, Quickheal Technologies, MPS, are among the smallcaps that logged a double-digit rise in their share prices last week.

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Where are markets headed?

In the coming week starting from Monday, October 9, all eyes will be on the beginning of corporate performance for the second quarter of the current fiscal year (Q2 FY24), spanning from July to September.

The anticipation among investors is particularly high as India’s largest software services company, Tata Consultancy Services (TCS), is slated to unveil its Q2 results on October 11, 2023, with HCL Technologies and Infosys following suit on October 12, 2023.

‘’RBI kept a hawkish tone on liquidity management stating that they might consider Open Market Operations sales. This led India’s 10-year government bond yield to rise to 6 month high. Overall, we expect the market to remain range-bound with a bout of volatility given the uncertainty still looms globally, despite the ease in US 10-year bond yield and fall in crude oil prices,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.

Technical View: The surge in select IT majors ahead of their earnings is certainly encouraging but others are still not offering any clear signals, according to Ajit Mishra, Ajit Mishra, SVP – Technical Research, Religare Broking.

‘’Besides, we are seeing early signs of exhaustion in the broader indices, especially in the midcap index. Considering all, traders should stay focused on stock selection and prefer index majors over others,” added Mishra.