The decline of the stock market is now reminiscent of the Corona period. Especially in smallcap shares, such a big decline was not seen since the Korana period. The Nifty’s smallcap 100 index has fallen more than 12 % so far this month. Earlier, such a decline was seen in March 2020, when lockdown started in India. Today, on 27 January, the Nifty Smallcap 100 index closed down to 3.84 per cent. The fall of the decline was that out of the total hundred shares included in this smallcap 100 index, 94 shares have been closed in red mark. Out of this, 27 shares have fallen by 5 per cent or more.
The data showed that such a huge decline in the Smallcap index was last in March 2020, when there was a terrible situation among investors due to the corona epidemic. However, it is also necessary to mention that this smallcap index was cured in later months and that year it not only closed in the green mark, but it also gave a great return of 21 per cent.
By the way, except the year 2022, the Nifty Smallcap index has given returns in double digits 4 times in the last 5 years. In 2024 last year, it gave a great return of 23.94 per cent. Earlier in 2023, it gave a return of 55.62%. In 2021, it gave a bumper return of 59.28% per cent. Whereas in 2020, the index rose by 21.47% per cent. However, it declined in 2022 and that year it gave a negative return of 13.80 per cent.
Market analysts say there are a total of four reasons behind the decline in smallcap stocks- weak results of companies, high valuation, lethargy in consumption and drop in rupee against US dollars. Apart from this, the selling of foreign investors has also done the work of adding ghee to the fire.
Meanwhile, the Sensex and Nifty also came to the lower level of their 7-maheen. The Nifty closed down even though even 23,000. Research, Senior Vice President of Railways Broking, Ajit Mishra said that the Nifty’s technical chart is still weak for decline. However, the range of 22700 to 22900 can serve as immediate support for this. At the same time, the boom may have to face strong resistance in the zone of 23,450-23,650 above.
Ajit Mishra said that real concern is in midcap and smallcap stocks, where there is a continuous decline and it is unlikely to decrease in the near future. At present, there is pressure on the stock market due to all the global factors. The results of 4 of American’s 7 largest tech companies are coming this week. Meanwhile, a startup from China, Deepsek, has created a stir in the global market by launching a free, open-source AI model.
This model is ready to compete with Openai’s chatgpt. After the launch of this new AI tool, it was downloaded in large quantities on the app store, which shows the threat to the American tech veterans. Apart from this, the statement of the US Federal Reserve Bank about interest rates is coming on January 29, which can play an important role in deciding the direction of the market. It is expected that the Federal Reserve will keep the interest rates stable.
However, the most important event for the Indian stock market will come on Saturday 1 February on the last day of this week. Keep in mind that the stock market will also be open that day. Finance Minister Nirmala Sitharaman will present a Band in Parliament on 1 February, which will be very important for both the stock market and the country’s economy. It is believed that the government may announce some big measures related to increasing consumption in the budget and promoting spending on infrastructure.
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