Smallcap index touches record high in the overall lacklustre markets; here’s what investors should do

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Markets ended lower for the second consecutive session led by the sharp last hour decline. Financials and metals came under selling pressure and dragged markets.

At close, the Sensex was down 337 points or 0.68% at 49,564, and the Nifty was down 124 points or 0.83% at 14,906.

Among sectors, except for PSU Banks, all other sectoral indices ended in the red with Nifty metal index down over 3 percent and Nifty Bank index down 1%..

The SmallCap index on the other hand hit a new record high of 23,093 in the intra-day trade. In the past one month, the SmallCap index has rallied 11%as against a 4.6% and a 7.6% gain in the MidCap and Sensex. Stocks like Angel Broking and Apcotex have zoomed 100% in a month.

HDFC Bank, ICICI Bank, Reliance were the biggest contributors to the fall on the Sensex. M&M and IndusInd Bank were the best gainers among the nine stocks that ended in the green on the 30-share index.

Automotive Axles, Gayatri Projects, Shakti Pumps, Pokarna, TV Today, TCI Express, Just Dial, Walchandnagar Industries, SORIL Infra Resources, H.G. Infra Engineering, Shivam Auto and Emami Realty rallied between 10-20% in the intra-day session today.

Tata Motors declines for 2nd straight day on a cautious management commentary. Taro Pharma’s weak Q4 earnings lead to a fall of 2% in Sun Pharma. Indiabulls Housing surges 9% & Bosch 7% after a strong Q4.

More than 300 stocks, including IOC, Wockhardt and Tata Coffee, hit a fresh 52-week high on the BSE.

India VIX, the volatility gauge, was inched higher on Thursday and closed the day with gains indicating higher volatility on the weekly expiry day.

Here’s what experts say investors should do on Friday

Ajit Mishra, VP – Research, Religare Broking

Markets witnessed profit taking for the second day in a row and lost nearly a percent. After opening on a flat note, the benchmark traded lacklustre however selling pressure in the latter half pushed the index lower. Weak global cues are weighing on the sentiments for the last couple of sessions and we may see further choppiness in global markets on inflation fear.

However, the reduction is COVID cases in India is certainly comforting the participants. We believe the Indian markets could outperform in the near term given it has underperformed when the global markets were rallying. We suggest keeping a check on leveraged positions and focusing more on managing the overnight risk.

Manish Shah, Founder, www.Niftytriggers.com

Nifty closed the day marginally lower as it declined to fill the gap that caused it to move beyond the resistance at 15000-15050. Has declined for last two days and it is at the “gap area”. The decline that happened today in last one hour is due to weekly expiry day selling. Next week is going to be expiry week and it will be interesting to watch how the market pans out.

Nifty is now touching the rising trendline coming up from the lows of March 2020. This trendline has acted as a support to falling index whenever it has touched it.

Nifty has already broken above the resistance at 15000-15050 and obviously there has been no follow up to the rising prices. For rally to continue Nifty needs to break above 15050 which could mean a rally towards 15450-15500. Support zone for Nifty is at 14750-14700. If Nifty trades below 14700 the breakout fails and we will see a grind between 15050-14300 for some more time.