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    Equity Markets Are Showing Us Signs of Weakness


    The divergence of between Nifty and small-cap index this week signaled towards weakness in the Indian equity markets. Nifty Cash had opened at 10,648 points this week and closed at 10,696 gaining 91 points or 0.86 percent. During the period it made a high of 10,765 and a low of 10,558.

    On the other hand, small-cap index opened at 7,854 and closed at 7,700, losing 114 points or 1.45 percent after a low of 7,691 points.

    Equity Markets Are Showing Us Signs of Weakness

    8,000 levels has become a major hurdle for the next week and if small cap breaks to the lower side 7,600 level then it can slide down further.

    While it is popular to use large caps as a measure of the stock market, it is inevitable to ignore the small caps that make up for most of the market. Tracking them gives us a good insight and now since the small caps are performing worse than large caps, it is pointing towards a weakness in the broad market.

    When investors are optimistic (bullish), they invest in small markets, but it looks like they are not so hopeful and would rather put their money in large-cap stocks.

    In private and PSU banks sector index rallied supported by HDFC bank after SEBI allowed opening the window for institutional trading series (6 lakh series) for a day on 1 June 2018. Among the minors, sugar sector topped the list. Dhampur sugar mills gained 12.20 percent, Dwarkesh Sugar 9.96 percent, Dalmia Bharat Sugar and Industries 5.09 percent.

    Sector-wise performances this week:

    Major Sector % Movement
    Banks-Private and PSU 1.45%
    Fertilizers 0.55%
    Automobiles and auto-parts 0.52%
    FMCG 0.22%
    Chemicals 0.22%

    Minor Sector % Movement
    Sugar 5.32%
    Services 1.10%
    Films 0.59%
    Telecom 0.18%
    Consumer Goods -0.34%

    Small Cap gainers this week:

    Company Name Sector LTP (Rs) % Change
    Karur Vyasya Bank Banks-Private and PSU 105.75 6.44%
    National Fertilizers Fertilizers 50.8 7.86%
    Monsanto India Fertilizers 2,851.30 4.76%
    Rallis India Fertilizers 212.8 2.36%
    Munjal Showa Automobiles and auto-parts 234.25 13.55%

    Mid Cap gainers this week:

    Company Name LTP (Rs) % Change
    Torrent Power 268 16.67%
    KRBL 530 15.12%
    Torrent Pharmaceuticals 1455 10.39%
    Central Bank of India 74 10.10%
    Indiabulls Ventures 449 9.94%

    Mid Cap losers this week:

    Company Name LTP % Change
    Avanti Feeds 1,547 -20.87%
    PC Jeweller 156 -18.86%
    Dilip Buildcon 859 -17.52%
    Prestige Estate Projects 239 -11.25%
    Divis Laboratories 1,053 -8.32%

    Read more about: nifty smallcap
    Story first published: Saturday, June 2, 2018, 12:06 [IST]
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