During the month, Sensex climbed 1.56%, while mid and smallcap indexes were up 3.65% and 1.13%. respectively.
Six smallcap stocks have delivered over 50% returns, with ITI Ltd topping the charts after a 68% rally. In the last six months, the stock has delivered multibagger returns to investors, rising 116%.
The main trigger for the company was that it developed its own branded Laptop and Micro PC in the market that matches international quality and performance.
ITI Ltd was followed by Omaxe, whose shares gained 64% and Jai Balaji Industries, which rose 61% in September. IFCI, GTL Infrastructure and NIIT are the other stocks in the smallcap pack which have delivered over 50% returns to investors in September.
In the midcap segment, IRFC was the leading gainer during the month with a 52% rally, and Indian Overseas Bank (IOB) was a close second, which jumped 52%.
State-owned NTPC and infrastructure major L&T led the rally in the largecap universe with 11% gain each in the month. Bajaj Finance, Power Grid and Airtel have each rallied over 8%.Analysts say low liquidity coupled with mixed global cues and a lack of catalysts to stimulate buying meant that the market is encountering strong resistance at higher levels.
Throughout the current week, IT stocks underperformed due to adverse global cues, while the pharma sector witnessed strong buying interest as investors adopted a defensive strategy in response to global uncertainties.
What should investors do?
Analysts say volatility is expected to remain elevated in the short term, given the upside risk of domestic inflation on account of higher crude prices.
“Investors will closely monitor upcoming releases of domestic, US, and Chinese PMI data, among other indicators, as they are expected to shape future market trends,” said Vinod Nair, Head of Research at Geojit Financial Services.
Going ahead, auto stocks will remain in focus as companies will announce monthly sales numbers. Investors will also keep a close watch on the RBI policy meeting, which is scheduled next week.
“Overall we expect the market to trade in a broader range as the higher oil price has rekindled the worry over inflation and might result in a prolonged high interest rate environment,” said Siddhartha Khemka, Head – Retail Research, Motilal Oswal Financial Services.
Technically, Nifty needs to close above 19,750 to witness a decent rally over the short term.
“A close or sustained move above 19,750 might take Nifty on a ride towards 20,500-20,700. On the flip side, a fall below 19,470 might trigger the resumption of the downtrend,” said Rupak De, Senior Technical analyst at LKP Securities.
(With inputs from Ritesh Presswala)
(Disclaimer: Recommendations, suggestions, views and opinions given by the experts are their own. These do not represent the views of Economic Times)
