This week has not been good for the stock markets. The Sensex fell 491 points or 0.83 per cent. Nifty also slipped 141 points. The biggest hand in the decline of the market was the rise in US retail inflation. Due to this, selling pressure was seen on all the big and small stocks. But, the biggest selling hit was on smallcap stocks.
The BSE Smallcap index slipped 3.4 per cent. 76 smallcap stocks fell between 10 and 93 per cent. These include Forbes Gokak, Solara Active Pharma Sciences, GE Power India, Stowe Craft, Fairchem Organics, Lasa Superorganics, Jubilant Industries, Jaypee Infratech and Gati.
However, shares of Shankar Buildcon, Zee Media, DB Realty, Gujarat Narmada Valley Fertilizers & Chemicals, Omaxe, Butterfly Gandhimathi and Mahindra Lifespace rose up to 32 per cent during this period.
Vinod Nair, Head of Research, Geojit Financial Services, said, “There was a lot of volatility in the market this week. The market movement going forward will depend on the signals from the foreign stock exchanges. The market will also keep an eye on the results of the companies.”
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The BSE Midcap index fell 2 per cent. Torrent Power, Endures Technologies, Tata Power, Kansai Nerolac Paints, 3M India, Crompton Greaves, ABB India, Zee Entertainment and Bayer CropScience were the major contributors in this.
Yash Shah, Head of Equity Research, Samco Securities, said that the market was under pressure due to the expectation of further hike in interest rates in the US sooner than expected. Indeed, retail inflation in the US has reached a 40-year level. Due to this, there is a possibility of increasing the interest rate earlier than expected.
The US Federal Reserve had earlier planned to raise rates in March. But, after the inflation figures on Thursday, it has called an emergency meeting on February 14. It is believed that there will be an announcement of increasing the interest rate in this. If there is an increase in the interest rate, then its effect can be seen on the domestic market. However, some analysts say it has already hit the domestic market. So the market will not fall much.
However, analysts have advised retail investors to exercise caution. They say that in the current environment, they should avoid making lump sum investments. The volatility in the market may continue in the next two-three months.
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