Smallcap Index Outperforms; 100 Stocks Rally Up to 46 Percent

The broader market delivered a mixed performance this week, but smallcap stocks emerged as clear outperformers, with nearly 100 counters rallying up to 46 percent. Despite pressure on benchmark indices, the smallcap space showed resilience amid stock specific buying.

Sensex and Nifty Close Lower Amid IT Selloff​

In a volatile trading week, the BSE Sensex declined 953.64 points, or 1.14 percent, to close at 82,626.76. The Nifty50 fell 222.6 points, or 0.86 percent, to end at 25,471.10.

Heavy selling in technology stocks weighed on the benchmarks. The Nifty IT index dropped more than 8 percent during the week. The Nifty Energy and Oil and Gas indices fell around 2 percent each, while the Nifty FMCG index slipped nearly 2 percent.

On the other hand, the Nifty Media index surged 5 percent. The Nifty PSU Bank, Consumer Durables, and Defence indices advanced roughly 3 percent each. The Nifty Auto gained about 2 percent, while the Nifty Pharma index added around 1 percent for the week.

Shrikant Chouhan, Head Equity Research at Kotak Securities, noted that while global equity markets remained strong, Indian markets underperformed. He said that the BSE Sensex and Nifty 50 ended the week in negative territory, but midcap and smallcap indices outperformed larger peers. The BSE 250 smallcap index recorded gains of about 1 percent. He added that sector trends remained mixed, with BSE Healthcare, BSE Auto, and BSE Capital Goods indices posting gains, while the BSE IT index saw a sharp weekly correction amid concerns linked to progress in artificial intelligence.

FIIs Turn Net Sellers; DIIs Provide Support​

Foreign Institutional Investors turned net sellers during the week after offloading equities in Friday’s session, reversing their buying trend seen in the first four trading sessions. Overall, FIIs sold equities worth Rs 4,019.09 crore during the week.

Domestic Institutional Investors extended support to the market, with net purchases of Rs 6,883.81 crore.

Smallcap Stocks Lead the Charge​

The BSE Smallcap index rose 0.8 percent during the week, outperforming the benchmark indices.

Among the top gainers were JITF Infralogistics, GE Power India, Lincoln Pharmaceuticals, Avanti Feeds, Blue Cloud Softech Solutions, TVS Supply Chain Solutions, Axiscades Technologies, Sika Interplant Systems, SML Mahindra, and Lumax Industries. These stocks advanced between 25 percent and 46 percent.

On the losing side, SpiceJet, Ecos India Mobility and Hospitality, Safari Industries India, Jyoti Resins and Adhesives, CarTrade Tech, Ceinsys Tech, Pearl Global Industries, HLE Glascoat, Foods and Inns, Reliance Infrastructure, and Mastek declined between 13 percent and 23 percent during the week.

Where Is the Market Headed?​

Amol Athawale, VP Technical Research at Kotak Securities, said that the intraday market texture remains weak. He stated that a fresh selloff is possible if the market breaks below the 20 day simple moving average or the 25,400 level on the Nifty and 82,500 on the Sensex. Below these levels, the correction could extend to 25,300 and 82,200, with further downside toward 25,150 to 25,100 and 81,700 to 81,500. On the upside, 25,600 and 83,100 would act as immediate resistance levels. A move above this zone could push the index toward the 50 day simple moving average around 25,800 to 25,900 and 83,700 to 84,000.

Nagaraj Shetti, Senior Technical Research Analyst at HDFC Securities, said that the emergence of selling pressure on Friday has dampened attempts of a market recovery. He noted that the short term negative chart pattern suggests further weakness in the coming sessions. A decisive slide below 25,450 could drag the Nifty toward 25,200, which coincides with the 200 day exponential moving average. Immediate resistance is placed at 25,600.

Rupak De, Senior Technical Analyst at LKP Securities, said that from a technical standpoint, the setup has turned relatively cautious, with the index slipping below its 20 day moving average for the first time in recent sessions. He pointed out that the Nifty has also breached the 38.2 percent Fibonacci retracement of the prior upmove from 24,571 to 26,341. With the index closing below the key support level of 25,500, the near term bias appears weak, and there is potential for a decline toward the 25,000 mark. On the upside, immediate resistance is seen around 25,800.

With the Q3FY26 earnings season nearing completion and global cues influencing sentiment, market direction in the coming sessions is likely to hinge on technical levels and broader macro developments.