28 stocks in BSE500 index rose 10-30% as small, midcaps outperform

Market Outlook
There are as many as 28 stocks in S&P BSE 500 index that rose 10-30 percent for the week ended on May 14

There are as many as 28 stocks in S&P BSE 500 index that rose 10-30 percent for the week ended on May 14

Bears took control of D-Street pushing Nifty50, and Sensex below crucial support levels largely weighed down by a rise in COVID-19 cases, fresh lockdowns announced by various states, as well as a possible rate hike in the US due to high inflation & rise in commodity prices weighed on sentiment.

The Nifty50 closed below 14700 much below the crucial support of 50-Days Simple Moving Average (SMA) placed at 14,723. The S&P BSE Sensex also closed below 49,000 mark for the week ended on May 14.

The S&P BSE Sensex and Nifty50 were down by about 1 percent each while the S&P BSE Mid-cap index fell 0.49 percent, and the S&P BSE Small-cap index was down by 0.08 percent respectively for the week ended on May 14.

The broader market has been resilient so far to the selloff seen in the benchmark indices. Experts are of the view that the outperformance is likely to continue in the coming few weeks as well.

“We have been constantly echoing our bullish view on the broader markets. We reiterate that in any bull run when the benchmark goes into some consolidation; it’s the MIDCAP and SMALLCAP which outperform and this is what is happening. They might continue with their upside in the coming weeks too,” Mehul Kothari, AVP – Technical Research at AnandRathi said.

There are as many as 28 stocks in S&P BSE 500 index that rose 10-30 percent for the week ended on May 14 that include names like BEML, Wockhardt, Suzlon Energy, Indian Bank, SpiceJet, Birla Corp, PTC India, Omaxe, and Venky’s India Ltd etc. among others.

Sectorally, Capital Goods, power, infra, as well as Utilities rose more than 2 percent each while metals, IT, banks, realty saw profit-taking for the week ended May 14.

“After seeing unprecedented up move since the start of the year the BSE Metal Index fell by 4 percent this week. Amongst sectors, the BSE Capital Goods Index rose by 4 percent followed by BSE utilities which is up by 2.7 percent,” Rusmik Oza, Executive Vice President, Head of Fundamental Research at Kotak Securities said.

“PSU stocks were major gainers this week led by names like Coal India, IOC, Power Grid, and NTPC. The BSE PSU Index was up 3 percent this week. The staggered state-level restrictions rather than a nationwide lockdown is limiting the impact relative to last year,” he said.

Oza further added that stable 10 Year G-Sec Yield and Indian currency is also helping Indian markets sustain even though we are seeing the highest spread of the pandemic.

Technical View

Equity benchmark snapped past two weeks’ winning streak amid volatile global cues. Nifty lost by about 1 percent to end the week at 14,678. Sectorally, pharma, FMCG, and PSE outshone

Technical experts see the index consolidating within a band of 14,400 on the downside, and 14,900-15000 levels on the upside. Traders can use dips towards 14,400 as a buying opportunity.

“The Nifty is expected to extend its consolidation (14400-14900 range) in the coming week amid stock-specific action, while our medium-term view of 15400 remains intact,” Dharmesh Shah, Head – Technical, ICICIdirect said.

“Capitalise dips towards 14400-14500 to accumulate quality large-cap and midcaps. BFSI, Infra, and Consumption provide a favourable risk-reward setup, while profit booking in Metal stocks, after a sharp rally, presents fresh entry opportunities,” he said.

Shah says that his preferred large caps stocks include names like HDFC Ltd, Reliance Industries, Titan Company, Berger Paints, Tata Motors, SAIL. In the mid-cap space, he like Bata India, Ipca Laboratories, Astral Poly, SKF Bearing, KNR Constructions, Dhanuka, GPPL, Philips Carbon are preferred bets.

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