The BSE SmallCap index faced ongoing pressure in Tuesday’s trading session, dropping 2% as persistent selling by foreign institutional investors (FIIs) and subdued domestic earnings weighed heavily on smallcap stocks.
At 10:30 AM, the BSE SmallCap index was down 1,261 points, or 2.3%, trading at 54,387, making it the biggest loser among the broader market indices. In comparison, the BSE Midcap index and the BSE Sensex fell by 1.3% and 0.40%, respectively. Over the past four trading days, the SmallCap index has declined by a total of 5%.
According to data from NSDL, FIIs have offloaded Indian equities worth Rs 82,845 crore in October up to the 21st, while domestic institutional investors (DIIs) have made net purchases totaling Rs 74,176 crore during the same period.
Dr. V K Vijayakumar, chief investment strategist at Geojit Financial Services, noted that despite the ongoing selling pressure from FIIs, valuations in the Indian market remain elevated. “Even after the correction triggered by sustained FII selling, Indian market valuations are higher than historical averages, although largecap valuations may be justified by their long-term growth prospects,” he stated.
Several stocks within the BSE SmallCap index experienced significant declines, with Vardhman Holdings, Authum Investment & Infrastructure, Amber Enterprise India, PNC Infratech, Jana Small Finance Bank, Antony Waste Handling Cell, Renaissance Global, Garden Reach Shipbuilders & Engineers, and Gravita India dropping between 7% and 12% during Tuesday’s intra-day trade.
Notably, RBL Bank, PNC Infratech, Aptech, CSB Bank, Equity Small Finance Bank, Goodyear India, Jammu & Kashmir Bank, MTAR Technologies, Shalimar Paints, Ujjivan Small Finance Bank, and Utkarsh Small Finance Bank were among 36 stocks in the SmallCap index that hit their respective 52-week lows during the trading session.
PNC Infratech notably fell to a 52-week low of Rs 301.3, plunging 18% after a staggering 20% drop the previous day. This decline follows the announcement from the Ministry of Road Transport & Highways (MoRTH) disqualifying the company from participating in any tender process for one year, effective October 18, 2024.
Related topics: