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.

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:

Small Cap gainers this week:

Mid Cap gainers this week:

Mid Cap losers this week: