The smallcap and midcap indices rebounded on March 4, ending their multi-day losing streak as investors looked for bargain-buying opportunities. Despite the overall weak market sentiment and selling pressure in benchmark indices, the Nifty Smallcap 100 and Nifty Midcap 100 saw gains, with investors showing renewed interest in beaten-down stocks.
Nifty50, Smallcap 100 and Midcap 100 Index Performance
The Nifty 50 index once reached a record high of 26,277.35 on September 27, 2024. However, it has since dropped by 16 percent and is now at 22,082.65. Despite this overall decline, the index showed some positive movement today, rising by 0.60 percent from its opening price.
Similarly, the Nifty Smallcap 100 index hit its highest level of 19,716.20 on December 12, 2024, but has now fallen by 25 percent to 14,762.60. Even though it is significantly down from its peak, the index gained around 2 percent today from its opening price, showing some signs of recovery.
The Nifty Midcap 100 index also experienced a sharp drop. It reached an all-time high of 60,925.95 on September 24, 2024, but has since declined by 21 percent to 48,007.85. However, it gained over 1 percent today, suggesting that the market could be stabilizing. While all three indices are still far from their peaks, today’s gains hint at possible recovery trends.
Market Correction and Stock Movement
After a steep correction across segments, investors are now finding value in select stocks, leading to a bounce in smallcaps and midcaps. While the broader market remains under pressure, today’s rebound suggests that some investors see opportunity in the recent sell-off.
Best and Worst Performing Stocks Today
Among the top gainers in the Nifty50 space, Garden Reach Shipbuilders (9 percent), Blue Star (8.5 percent), Sterling and Wilson (7.8 percent), and Olectra Greentech (7.5 percent) saw strong gains. In the midcap segment, Bharat Dynamics (7.2 percent), Cochin Shipyard (6.8 percent), RVNL (6.5 percent), and BSE shares (6.3 percent) led the rally.
On the other hand, some stocks continued to face selling pressure. Jubilant FoodWorks (-4.2 percent), Zee Entertainment (-3.8 percent), Biocon (-3.5 percent), and Paytm (-3.2 percent) were among the worst performers today, reflecting investor caution in specific sectors.
Analysts Views on Market Valuations
Market experts have been cautioning about stretched valuations in the midcap and smallcap space. “We expect the Indian market to see a diverse performance across caps, sectors, and stocks in the next few months. Large-cap indices may remain range-bound, while several midcap and smallcap stocks could face further correction,” analysts at Kotak Institutional Equities noted.
Similarly, Amish Shah, Head of India Research at Bank of America Securities, remains cautious, stating that “mid and small-cap stocks are still overvalued despite recent corrections and could see further declines.”
Outlook for the Market
Looking ahead, analysts expect investors to reassess valuation multiples and earnings estimates. With stretched valuations in the smallcap and midcap segments, the correction might not be over yet, but today’s rebound provides hope for cautious optimism in the broader market.
Written By – Nikhil Naik
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