Gold Silver Reports — Markets Rebound on Bargain Hunting in Mid, Smallcaps — Shares in the midand smallcap space led the rebound on Dalal Street on Friday as investors found bargains in this space following a sharp fall the previous day on concerns over escalating tensions between India and Pakistan.
After falling around 4% on Thursday , the BSE MidCap and SmallCap indices gained 2% each, but the Sensex was marginally up, suggesting a section of the market thinks that the market is not yet out of the woods.
“It might be too early to say, but if we go another two days without any escalation in conflict, then probably we can say that it is be hind us,“ said Mark Matthews, Singapore-based head of research-Asia at Julius Baer.
The Sensex ended up 38.4 points, or 0.1%, at 27865.96, while the Nifty reclaimed the 8600-mark to close at 8611.15 points, up 0.2%, on Friday . The volatility index India VIX cooled off, ending down 7% at 17.18 after surging 33% on Thursday .
The Indian benchmark indices fared better compared to the Asian and European markets which fell up to 1.9% on concerns over the health of German banking giant Deutsche Bank.
In the previous session, indices had tumbled 1.6% to log their biggest single-day fall in three months on concerns that tension between India and Pakistan may escalate into a full-blown war. For the week, the Nifty ended down 2.5% and the Sensex ended 2.8% lower.
Some of the top Sensex gainers on Friday included Mahindra & Mahindra, GAIL India, ONGC, Tata Steel, Lupin and Tata Mo tors that gained around 1-3%.
On the rebound in midcaps, Tata Communications, Reliance Communications, MRF, UPL and MRPL gained 4-10%. “Domestic institutions are sitting on a lot of liquidity and they are using every drop to build positions, which is supporting mid and smallcaps,“ said Rajesh Cheruvu, head of equities, Sanctum Wealth Management.
Provisional data showed that foreign portfolio investors net sold shares worth ` . 1,028.31 crore on Friday while domestic institutional investors net bought shares worth ` . 1,560.29 crore.
Markets are likely to remain edgy in the near-term due to the upcoming RBI policy on October 4 and the US elections in November, said market strategists. Expensive valuations relative to other markets in the region may limit any major upside, they added. — Neal Bhai Reports