Broader Indices Rally: Markets Continue to Shine as Small-Caps Steal the Spotlight
The stock market has been seeing sheer momentum over the last three weeks. The rally in broad indices has again provided hope to investors, and mid-cap and small-cap stocks have performed outstandingly. Indian equity markets maintained their momentum this week as well, and this is why the market sentiment remains quite positive.
Broader Indices Rally: Sensex and Nifty’s Journey
The Nifty50 moved up 213.05 points, or 0.83 percent, this week to close at 25,327.05. The Sensex rose 721.53 points, or 0.88 percent, to 82,626.23. These figures are not mere figures, but a gauge of investor optimism and market mood.
BSE’s large-cap and mid-cap indices rose by 1 percent, while the small-cap index surged by 2 percent. This clearly shows that the rally of the broader indices has reached its peak, and small stocks have contributed the most to it.
FIIs Selling, DIIs Buying, and Market Balance
An interesting development in the market was that Foreign Institutional Investors (FIIs) sold shares worth ₹1,327.38 crore for their 12th consecutive week. However, Domestic Institutional Investors (DIIs) once again demonstrated their confidence, purchasing equities worth ₹11,177.37 crore. The DIIs’ 23rd consecutive week of buying has provided a strong support system for the market, balancing out the FIIs’ selling.
Broader Indices Rally: Sectors Showed Weakness
Sectoral performance was also quite inspiring. The FMCG index was slightly weak and fell 0.5 percent, but every other sector showed an impressive run. The Nifty PSU Bank index gained almost 5 percent, the Realty index jumped more than 4 percent, the Defence index rose 3.4 percent, and Energy and Oil & Gas also rose by 2 percent.
This is the momentum that makes the broader indices rally stronger, where every sector contributes.
Expert View: What’s Making the Rally Special
Vinod Nair, Research Head at Geojit Investments, said, “Indian equities closed on a firm note, with mid-cap and small-cap stocks leading the overall momentum. Robust domestic inflows covered FII selling and sustained the rally.”
He said that GST rationalization and upcoming festive demand have put consumption-driven sectors in the spotlight. Real estate and auto stocks saw strong buying interest, while IT and pharmaceuticals benefited from U.S.-India trade talks.
Impact of Global and Domestic Factors
Global factors are also fueling this rally. The U.S. Fed’s 25 bps rate cut provided a boost to global equities. Additionally, Indian markets have stabilized further with CPI inflation remaining at 2.1 percent. The contraction in food prices kept inflation under control, a positive sign for investors.
On the domestic front, the manufacturing PMI is expected to be an important indicator, providing early signs of demand revival. Experts believe that if FIIs resume inflows, the broader indices could rally even faster.
The Story of Small-Caps: A Jump of Up to 36%
The small-cap index contributed the most to this rally, with some stocks returning 15 to 36 percent. These include IRM Energy, Banco Products (India), Sindhu Trade Links, Hi-Tech Pipes, Ramco System, Redington, Welspun Enterprises, Redtape, Shalimar Paints, and Bajaj Consumer Care.
But not every story was positive. Some stocks, such as Balmer Lawrie Investment, ixigo, KRBL, KR Rail Engineering, and Dreamfolks Services, fell by 9-12 percent. Therefore, stock-picking will need to be smart and cautious even amid the broader indices rally.
Broader Indices Rally: Nifty50’s Journey Ahead
Shrikant Chouhan of Kotak Securities says that both global support and domestic strength have combined to create a strong rally. Nifty and Sensex gained around 1 percent, while mid-cap and small-cap indices outperformed even more.
According to Rupak De of LKP Securities, Nifty slipped slightly on Friday, but if it holds above the support of 25,150, it could move towards 25,500 and then 26,000. Nagaraj Shetty of HDFC Securities says that the bullish pattern is still intact, and a minor dip could be a buying opportunity.
Amol Athawale of Kotak believes that the short-term market outlook is bullish, but range-bound activity could be seen due to overbought conditions. The strategy for traders is simple – buy on dips and book small profits on rallies.
Conclusion: The Story of the Broader Indices Rally
In today’s scenario, the broader indices rally is not just a market move, but a strong confidence booster for investors. The performance of mid-cap and small-cap stocks has once again proven that new avenues for growth are always open in the Indian equity market. Despite the selling by FIIs, the confidence of DIIs and global support has made the rally even stronger.
Investors will be watching GST rationalization, festive demand, and U.S. data in the coming week. If everything remains as expected, the broader indices rally could begin a new chapter.
Disclaimer:
The views and recommendations above are those of individual analysts or brokerage companies, not US News Weeks. We advise investors to check with certified experts before making any investment decisions.
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