Do you own any of these 50 smallcap stocks as the Sensex breaks its two-week losing streak?

 Do you own any of these 50 smallcap stocks as the Sensex breaks its two-week losing streak?

As many as 50 smallcap stocks experienced double-digit price increases last week, ranging from 10 to 30%, while the 30-share BSE Sensex finished the first week of October with a gain of 0.25 percent, breaking its two-week losing streak. After the Central Bank of India's Monetary Policy Committee (MPC) reaffirmed the status quo on mortgage interest rates and policy stance, in line with investor expectations, domestic markets closed higher. 

Five of the six MPC members voted in favor of the central bank's continued "withdrawal of accommodation" policy position. Additionally, by the end of the erratic week, confidence was reinforced by good macroeconomic figures and the tenacity of local investors. 

The Nifty 50 gained 0.08 percent, while the Sensex increased by 0.25 percent for the week. The BSE Smallcap index increased this week by 0.79 percent while the BSE Midcap index decreased by 0.81 percent.

On Friday, October 6, the Nifty 50 closed at 19,653.50, an increase of 108 points or 0.55 percent, and the Sensex closed at 65,995.63, an increase of 364 points or 0.55 percent. The BSE Smallcap index finished 0.56 percent higher while the Midcap index increased by 0.66 percent.

Following a break in the sell-off in the bond market, international signs were also encouraging. When the Sensex closed on Friday, the 10-year US bond yields were close to 4.74. The dollar was stable and appeared poised to close the week up.

On the stock-specific front, up to 50 smallcap stocks outperformed the index last week with gains ranging from 10% to 30%. Among the smallcaps that had a double-digit increase in their share prices last week were Suzlon Energy, MSP Steel & Power, Balaji Telefilms, HBL Power, Infibeam Avenues, Network 18 Media, Ashoka Buildcon, PNB Gilts, Quickheal Technologies, and MPS.

Where are the markets going?

All eyes will be on at the beginning of business earnings for the remainder of the second quarter of the current fiscal year (Q2 FY24), which runs from July to September, in the next week commencing on Monday, October 9.

The biggest software services provider in India, Tata Consultancy Services (TCS), is scheduled to release its Q2 results on October 11, 2023, with HCL Technologies and Infosys following on October 12. This is causing particularly high expectation among investors. 

"RBI maintained its hawkish stance on liquidity management, indicating that they may take into account sales through Open Market Operations. India's 10-year government bond yield increased to a six-month high as a result. Despite the easing of the US 10-year bond yield and the decline in crude oil prices, we expect the market to stay range-bound with some volatility, according to Siddhartha Khemka, Head of Retail Research at Motilal Oswal Financial Services.

 

Technical View: According to Ajit Mishra, SVP - Technical Research, Religare Broking, the increase in some IT giants ahead of their earnings is undoubtedly promising, while others are still not providing any definite signs.

In addition, the broader indices, particularly the midcap index, are beginning to exhibit early signs of weariness. In light of everything, traders should maintain their attention on stock selection and favor index majors over others,'' Mishra noted.