SmallCap index down 3%; IIFL Securities and Geojit freeze in 10% lower circuit | Market News

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Small-cap stocks were under pressure on Monday as they fell as much as 12 per cent on the BSE after a sharp sell-off in Indian stocks during the day.

Foreign institutional investors (FIIs) selling Indian stocks to make profits here and redirect their funds to Chinese markets has been one of the main reasons for the decline in Indian stocks.

Other factors including geopolitical, the new Securities and Exchange Board of India (SEBI) norms for trading in the Future & Options (F&O) segment, as well as the seasonality of October also played a key role, according to market analysts.

At 11:13 am, the BSE SmallCap index, the biggest loser among the broader indices, fell 3.3 per cent. In comparison, the BSE MidCap index fell 2 percent and the BSE Sensex fell 0.5 percent.

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A total of 32 stocks of the BSE Smallcap Index were stuck in the lower circuit and no buyers were seen on these counters. Geojit Financial Services (Rs 134.15) and IIFL Securities (Rs 357.35) were stuck in a 10% lower circuit on the BSE in intraday trade.

PC Jeweler (Rs 150.90), Mahanagar Telephone Nigam Limited (Rs 52.14), Kitex Garments (Rs 502.30), 63 Moons Technologies (Rs 369.40), Genus Power Infrastructures (Rs 362.65), Refex Industries (Rs 516.65), Solara Active Pharma Sciences (Rs 727.60) and Suraj Estates Developers (Rs 712.30) were among the stocks stuck in a 5 per cent lower circuit on the BSE.

This apart, shares of PG Electroplast fell 12 per cent to Rs 538.40 on heavy volumes. Despite falling 22 percent from its all-time high of Rs 694.50 that it hit on September 25, the consumer electronics company’s stock has soared 136 percent so far in the calendar year 2024.

In comparison, the BSE Smallcap Index rose 27 percent during the same period.

In a sudden turnaround in FII strategy, FIIs became massive sellers in the Indian market in October. During the three trading days of the month, FIIs sold shares worth Rs 30,718 crore in the cash market, according to provisional data. These sales were mainly triggered by the outperformance of Chinese stocks.

Globally, stock markets held up despite escalating tensions in the Middle East. The Indian market followed a different trajectory, with the Nifty 50 falling 4.5% last week. This sharp correction was mainly triggered by the FII sell-off in the cash market which touched Rs 40,509 crore in the last four days.

“This correction is an opportunity for long-term investors as the valuations of these stocks are fair and the outlook looks good. DIIs who have funds will continue to buy degraded quality stocks,” said Dr VK Vijayakumar, chief investment strategist at Geojit. Financial services.

Meanwhile, Amit Goel, co-founder and chief global strategist of Pace 360, believes that the worst of the geopolitical impact and China-related issues are now behind us.

“We started buying shares significantly yesterday and will continue to do so in the coming days. In the short term, we are optimistic about the markets. However, longer term, we remain cautious due to deteriorating global macroeconomic conditions and elevated valuations,” Goel said.

First publication: October 7, 2024 | 12:08 p.m. STI

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