The Nifty Smallcap 100 has risen almost 5% in the last four sessions. Foreign institutional investors (FIIs) reduced their selling pressure and became marginal buyers, contributing to a strong rally in broader market indices.
Up 5% in four consecutive sessions until November 27, the Nifty Smallcap 100 outperformed the headline Nifty 50, which increased 4.21 percent during the same time frame. Comparatively, the Nifty Midcap 100 reported an increase of 3.32 percent.
The Nifty Smallcap 100 rose 1.14 percent to an intraday high of 18,474.35, and the Nifty itself rose more than half a percent to an intraday high of 24,341.15, on November 27.
In contrast to the Smallcap and Midcap indices, which were up three sessions in a row, the Nifty ended the day on November 26 slightly down, down 0.11 percent, despite the market’s overall strength. Since small and mid-cap companies are usually more susceptible to liquidity flows, the shift in the FII’s posture is a good indicator.
The overall market performance occurs while investors process the ramifications of Donald Trump’s win in the US presidential election. Analysts caution that there may be difficulties in the future, even though India’s trade dynamics with the US may not be affected immediately.
Since India has a trade surplus with the US, it is unlikely to be affected in the first phase of Trump’s tariff plan, but it could soon be on his radar.
After the recent steep decline, we think that certain PSU stocks in the military, shipping, power, and railroad sectors present a good risk-reward opportunity over the medium to long term. We think that Reliance Industries’ overall poor performance and the recent Adani scandal have affected the Nifty 50 benchmark’s performance.
