Indian investors saw The latest tariff of Trump, slow corporate income and an tireless sales by foreign investors were eliminated in market money on Tuesday. Mid-and small-cap stocks took another difficult hit.
The benchmark index collapsed for the fifth straight session, with the Nifty 50 and S&P BSE-SENX reduced to 23,071.80 and 76293.60 points at a two-week low of 1.3%respectively. During the day, the headline index fell to 2%.
Heavyweight Reliance Industries Limited, HDFC Bank Limited, Larsen & Toubro Limited, and Tata Consultancy Services Limited weighed the benchmark. Between the NSE Sectoral Index, the Nifty Midsmall Financial Services Index took the biggest hit, with about 4% slipping, while the Nifty Midsmall Healthcare Index declined by 3.3%.
Provisional data shows foreign institutional investors (FII) 4,486 crore in Indian equity, while domestic institutional investors (DII) stepped into net procurement 4,002 crore. While FII has sold the net The price of shares in 98,393 crore year-to-year cash market is higher than the debas offset. 99,383 crores.
Trump’s trade war took to the center stage as he signed the orders from 12 March, ignoring 25% tariffs on steel and aluminum imports, ignoring warnings from Europe and China. The European Union and Canada quickly vowed vengeance, provoking global investors concerns.
India is also reviewing import tariffs on more than 30 items, including luxury cars and solar cells. Set-Trump’s expected tariff declaration to visit the US with Prime Minister Narendra Modi on Wednesday and Thursday is expecting a success that can reduce stress and restore confidence.
Trump Tariff is not a major concern for Indian markets directly, but to an extent it is an emerging market issue, and still affects India, said Ashish Somaiya, Chief Executive Officer of the White, Capital AMC. “We have to look through the next 60 days for clarity.”
In addition, the American market, which is in the late stage of the AI-run rally, needs to cool for the US dollar, so that it puts the markets for a breathing markets and emerging in markets, he said .
However, RBI’s intervention offered a breath, pulling the rupee to reduce the Monday record, the pressure was not reduced.
“The Indian equity market is dragged from the tireless FII sales operated by the weakness in the rupee and the relatively expensive evaluation between the emerging markets,” said Gaurav Dua, Head – Capital Market Strategy, Mirure Asset Sharekhan.
According to market experts, frequent foreign funds will keep the currency tightly, adding the instability of the market in the near period. Despite the efforts of the Central Bank, continuous FII sales increase demand for dollars, while global uncertainties, such as American trade policies and Federal Reserve’s interest rate decisions, weigh further over emotion. He said that adding pressure at the house is slowing down, which is challenging a permanent recovery in the rupee.
“The market already has a price in all positive developments, which explains widespread-based profit-booking (Tuesday),” said Kranthi Bathini, director of the equity strategy at Wealthmills Securities.
Smids near bear area
The pain was the most felt in the small and mid-cap segment on Tuesday, after the bear was closed in the area with the Nifty Smallcap 250 it was 3.42% to 15156.95-weeks. The total decline of the September 24 of 18688.30 is 18.9%-a decline of 20% or more is called a bear market.
The Nifty Midcap 150 dropped from 2.94% to 18,837 from 25 September, when the index brought a record high level of 22515.4 to 16.33%. Both comprehensive indices have reduced the Nifty, which has cured 12.19% since the high level of September.
Mahesh Patil, CIO, Aditya Birla Sun Life AMC said, “Middle and small cap have been sales in the middle and small cap as a result of moderation in the earning speed and the US-inspired global tariff stress.” Patil hopes to support the “fiscal and monetary stimuli” recently provided by the government and RBI to support the increase in earnings in the second half of this year. There is a possibility of raising a sharp bounce within the consolidation. ,
According to analytics firm indicharts, 76 (51%) out of 250 smallcap shares and 150 midcap shares (51%) trading 76 (51%) (51%) of indices less than 20%than the high level of September. Against this, 40% of 20% of the total Nifty Stock or September high of September 50 from 20%.
Patil says, “This is a good time to accumulate quality large cap and in some cases, small and midcaps with positive cash flow and proper assessment.”
However, even after recent reforms, SMIDs appear expensive. For example, the Index earns 34.86 times more twelve months over an average of 32.82 times 32.82 times. According to Bloomberg data, the smallcap 250 trade is 25.56 times 22.77 times more than 25.56 times the average.
“Despite the improvement of more than 16.5% from his recent height, the Nifty Midcap index from March 2023 is still growing by about 70%,” said Dhirj Railley, Managing Director and Chief Executive Officer of HDFC Securities.
The markets had decided to increase the high income in stock prices continuously, and in quarter results, disappointment has warned the valuation de-vendling in many middle and small-cap shares recently, he said that he said that there is a rapid improvement in the widespread market As with.
He also recommends that investors adopt a selective approach, which focus on large cap. “These shares operated by comparatively high income growth and more attractive evaluation, will offer better risk-doubtful returns than the middle and small-cap stocks.”
Some traders and investors said that margin calls were triggered, increasing sales in Indian equity. Essentially, when investors trade with leverage – invest 1 with 100% lensing to buy equity prices A market decline of 2- 20–30% increases their position significantly. This forces brokers to hit stop-loss levels and reduce the holdings aggressively, intensifying the spiral downwards, a merchant explained.
Investor nervousness
To ensure this, mutual fund inflices in the middle and small cap have crossed them in the large cap. For example, Ficadum Research suggests that there is a net flow in the mid-cap fund in the fiscal through December. 29,415 crore against the net flow of 28,138 crore in small cap funds and 15,079 crore in large-cap funds. But the opening of pure systematic investment scheme shows the investor nervousness. In December, NET SIP (registration minus dissection) was 9.37 lakhs against the opening FY23.
Gaurav Kulshresh, the head of IIFL Capital, IIFL Capital, said, “Anecdote evidence suggests that retail investors are affected when a one -year returns are negative.” “We have to look closely how the investor plays behavior.”
Depending on one year, the Nifty Midcap 150 has given a return of 7.2%, while the Nifty Smallcap 250 is returned to 3.9% to the closure level on Tuesday.
What will happen next?
Behind the Budget and the initial tariff of Trump, all eyes will be on the comment of Federal Reserve Chair Zerome Powell on Tuesday as it may indicate a possible rate cut in the coming months – an important factors for the market direction, Bathini of Wealthmills Securities said.
Powell is leading Capital Hill for annual testimony twice before Congress. Powell will appear before the Senate Committee on banking, housing and urban affairs on Tuesday and the House Financial Services Committee on Wednesday. The US Stock Index futures slipped further from its testimony as it would provide insight on tariffs and provide their impact on inflation in the world’s largest economy.
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