More than 200 smallcaps gain 10-90% in November as market hits record highs

It was a week of record runs, as Indian benchmark indices scaled new highs. Strong buying by foreign investors, a drop in commodity prices, the US Federal Reserve hinting at a slower pace of rate hikes and relaxation of Covid curbs in China all came together to aid buying.

For the week ended December 2, the Sensex rose 574.86 points, or 0.92 percent, to end at 62,868.5 and the Nifty added 183.35 points or 0.99 percent to close at 18,696.1 levels.

“The benchmarks Nifty and Sensex gained around 0.8 percent in the past week, creating all-time highs. A steady softening of global bond yields on expectations of ‘peak’ inflation and a decline in crude prices, helped equity markets continue the momentum and helped the Nifty50 log its new all-time high on a closing basis,” said Shrikant Chouhan, Head of Equity Research (Retail), Kotak Securities.

On December 1, the Sensex and the Nifty hit new highs of 63,583.07 and 18,887.60.

All sectoral indices ended in the green. The Nifty media and realty indices were up 4 percent. The metal index gained 3.7 percent and the Nifty FMCG was up 2.4 percent.

During the week, the BSE midcap index added 2.8 percent, the smallcap index 2.4 percent and the largecap Index added a percent.

In the week, foreign institutional investors (FIIs) purchased equities worth Rs 15,067.55 crore, while domestic institutional investors (DIIs) sold shares worth Rs 1,335.57 crore.

Also read: Market continues to make record highs with support from FIIs; rupee gains

November recap

In November, the Sensex rose 3.8 percent and the Nifty 4 percent. FIIs bought equities worth Rs 22,546.34 crore, while DIIs sold shares worth Rs 6,301.32 crore.

The BSE Mid-cap index added 2.3 percent, the smallcap index 2.4 percent and the largecap Index was up 3.6 percent in November.

More than 200 smallcap stocks gained between 10-90 percent with Kamdhenu, Rail Vikas Nigam, Honda India Power Products, UCO Bank, Karnataka Bank, Timex Group India, Housing & Urban Development Corporation, MPS, Mazagon Dock Shipbuilders, JTEKT India, TCPL Packaging and Sanghvi Movers rising 40-90 percent.

On the other hand, Nureca, Gayatri Projects, Future Lifestyle Fashions, Chemcon Speciality Chemicals, Sintex Plastics Technology, PC Jeweller, NR Agarwal Industries, Campus Activewear, Quess Corp and Sree Rayalaseema Hi Strength fell between 12-34 percent.

Also read: HDFC Securities bets on these 5 smallcaps for next 2-3 quarters

Where is Nifty50 headed?

Apurva Sheth, Head of Market Perspectives, Samco Securities

A number of significant events are scheduled in the coming week. First, we have statistics on the trade balance between the US and China, the world’s two biggest economies. China will disclose its month-on-month and year-on-year inflation data. These developments will be closely watched since they can decide the direction of the global indexes.

Back home, the focus will be on the Reserve Bank of India’s interest rate decision. The CPI fell below 7 percent in October after three straight rate increases of 50 basis points. As a result, the market anticipates a rate increase of 35 basis points rather than 50 basis points. The primary monitorable will be the monetary policy committee’s forecasts and views on inflation and economic expansion when it announces its decision on December 7.

Siddhartha Khemka, Head-Retail Research, Motilal Oswal Financial Services

The markets will take cues from RBI’s policy meeting and we expect them to tone down their stance, given the positive macro data and dovish commentary from Fed chair Jerome Powell. Investors will also keenly watch for the outcome of the Gujarat elections on December 8.

A result in favour of the ruling BJP will add to continued momentum, as it would mean a vote for stability and set the stage for the 2024 national election.

Other key events during the week would be the OPEC meeting, which will have a bearing on oil prices, US and India Services PMI, Europe Q3 GDP and the US Jobless claim data.

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