- Date : 10/10/2022
- Read: 4 mins
69 small-cap stocks deliver double-digit surge as geopolitical tension, Aggressive Fed stance, devaluating rupee and fears of economic downturn mar the market
The first week of October 2022 saw a reversal to the downward trend that has been going on since mid-August. Although SENSEX rallied to touch the 60,000 mark in mid-September, it has been a “one step ahead, two steps behind” journey in the last two months. Last week, market recovery was relatively stable with the SENSEX gaining over 1200 points on 4 October and maintaining it for the rest of the week. That was a recovery of 1.33% over the previous week, after cancelling out the negative opening on Monday, the 3rd of October.
The weekly scale in Nifty showed a long bull candle which could mean that the market will test the short-term resistance levels. Meanwhile, global cues have been mixed at best. The rupee continued to post record lows, as concerns over Fed rate hikes continue. The RBI is expected to intervene again to curb the rupee’s downhill ride.
Small Caps outshine in weekly performance
Coming back to last week’s performance, the sectors that excelled include metal, capital goods and realty. BSE Metal index rose 5.7%, capital goods went up by 3.6% while the realty index was up by 3.4%. The large-cap index gained 1%, midcaps gained 2% while BSE small-cap index added 2.5%.
Also Read: Is it a bull rally or a dead cat bounce case for the Indian stock markets
Among the small-cap companies, as many as 69 companies registered a double-digit percentage increase in their share prices. The top five performers in this segment last week are,
- Max Ventures and Industries – 38.96%
- Xelpmoc Design and Tech – 34.59%
- Mazagon Dock Shipbuilders – 28.38%
- Jaiprakash Associates – 27.84%
- Kuantum Papers – 27.27%.
64 other small-cap companies with double-digit weekly growth include HBL Power Systems, Gayatri Projects, Deep Industries, Cochin Shipyard, Dredging Corporation of India etc. Looking further back, Mazagon Dock Shipbuilders has increased by over 125% since mid-June this year, while Campus Activewear stocks increased 92.5%. FMCG stock KRBL increased by 90.2% while private bank Karur Vysya gained 83% during the same period.
On the other hand, stocks like Reliance Communications, Cressenda Solutions, Ingersoll Rand and JM Financial saw a decline in traded prices.
Also Read: Looking for multi-bagger stocks? Check out top 9 triple digit returns since Dusshera 2022
Macro Factors Influencing the Market
As the Fed continues to tighten its interest policy, other central banks are expected to continue in the same vein. This has weakened the emerging market currency values. An aggressive Fed rate would inevitably unfurl a period of an economic downturn in the US, with domino effects to be seen across the world.
Meanwhile, the Russia-Ukraine crisis keeps the geopolitical scenario in the doldrums. Europe, in particular, is gearing up for a harsh winter without the Russian gas supply to fall back upon. OPEC has decided to reduce production and supply which will inflate the critical crude prices.
With these factors as the backdrop, the market is keenly awaiting improvement in the inflation figures from leading economies, particularly the USA and China. India’s latest CPI data will also have an influence on market sentiments.
Also Read: 4 strategies for handling extreme market volatility
Parting Shot
As seen in the small-cap performance recently, stock-specific tractions can be expected in a rotational manner, which has been keeping traders busy. The market in general to move forward in a roller coaster ride for now, with flatness prevailing in absence of major global triggers. As long as global markets don’t show any signs of sustained recovery, volatility in the market is likely to stay. Experts are in favour of focussing on investments in top stocks through the monitoring of their occasional dips.
The first week of October 2022 saw a reversal to the downward trend that has been going on since mid-August. Although SENSEX rallied to touch the 60,000 mark in mid-September, it has been a “one step ahead, two steps behind” journey in the last two months. Last week, market recovery was relatively stable with the SENSEX gaining over 1200 points on 4 October and maintaining it for the rest of the week. That was a recovery of 1.33% over the previous week, after cancelling out the negative opening on Monday, the 3rd of October.
The weekly scale in Nifty showed a long bull candle which could mean that the market will test the short-term resistance levels. Meanwhile, global cues have been mixed at best. The rupee continued to post record lows, as concerns over Fed rate hikes continue. The RBI is expected to intervene again to curb the rupee’s downhill ride.
Small Caps outshine in weekly performance
Coming back to last week’s performance, the sectors that excelled include metal, capital goods and realty. BSE Metal index rose 5.7%, capital goods went up by 3.6% while the realty index was up by 3.4%. The large-cap index gained 1%, midcaps gained 2% while BSE small-cap index added 2.5%.
Also Read: Is it a bull rally or a dead cat bounce case for the Indian stock markets
Among the small-cap companies, as many as 69 companies registered a double-digit percentage increase in their share prices. The top five performers in this segment last week are,
- Max Ventures and Industries – 38.96%
- Xelpmoc Design and Tech – 34.59%
- Mazagon Dock Shipbuilders – 28.38%
- Jaiprakash Associates – 27.84%
- Kuantum Papers – 27.27%.
64 other small-cap companies with double-digit weekly growth include HBL Power Systems, Gayatri Projects, Deep Industries, Cochin Shipyard, Dredging Corporation of India etc. Looking further back, Mazagon Dock Shipbuilders has increased by over 125% since mid-June this year, while Campus Activewear stocks increased 92.5%. FMCG stock KRBL increased by 90.2% while private bank Karur Vysya gained 83% during the same period.
On the other hand, stocks like Reliance Communications, Cressenda Solutions, Ingersoll Rand and JM Financial saw a decline in traded prices.
Also Read: Looking for multi-bagger stocks? Check out top 9 triple digit returns since Dusshera 2022
Macro Factors Influencing the Market
As the Fed continues to tighten its interest policy, other central banks are expected to continue in the same vein. This has weakened the emerging market currency values. An aggressive Fed rate would inevitably unfurl a period of an economic downturn in the US, with domino effects to be seen across the world.
Meanwhile, the Russia-Ukraine crisis keeps the geopolitical scenario in the doldrums. Europe, in particular, is gearing up for a harsh winter without the Russian gas supply to fall back upon. OPEC has decided to reduce production and supply which will inflate the critical crude prices.
With these factors as the backdrop, the market is keenly awaiting improvement in the inflation figures from leading economies, particularly the USA and China. India’s latest CPI data will also have an influence on market sentiments.
Also Read: 4 strategies for handling extreme market volatility
Parting Shot
As seen in the small-cap performance recently, stock-specific tractions can be expected in a rotational manner, which has been keeping traders busy. The market in general to move forward in a roller coaster ride for now, with flatness prevailing in absence of major global triggers. As long as global markets don’t show any signs of sustained recovery, volatility in the market is likely to stay. Experts are in favour of focussing on investments in top stocks through the monitoring of their occasional dips.
