Nifty halts 4-week bull run
Concerns over inflated valuations, Sebi’s scrutiny of SMID MF schemes dampened investor sentiment
image for illustrative purpose
Sluggish Market
- MFs started to release stress test findings
- Investors pulled out of SMIDs
- Muted investor mood
Mumbai: The Nifty snapped a four-week gaining streak on Friday, as it fell 2.1 per cent for the week and formed a bearish engulfing pattern on the weekly charts, said Deepak Jasani, Head of Retail Research, HDFC Securities.
“The Nifty has been facing selling pressure on rises and we expect this to continue," Jasani said.
The cash market volumes on the NSE were high at Rs 1.50 lakh crore, aided by FTSE index rebalancing volumes towards the end of the session. The Nifty fell on Friday, pulling back after a rally in the previous session. While the Nifty closed the day at 22,023.35, down 123 points, or 0.56 per cent, the Sensex ended with a loss of 454 points, or 0.62 per cent, at 72,643.43.
The Small-cap index ended in the positive even as the advance-decline ratio rose to 0.83:1, he said.
The Asian markets mostly fell in line with the Wall Street on Friday after a sharper-than-expected jump in US wholesale prices dealt a blow to the hopes for interest rate cuts.
European stocks were on track for their eighth consecutive week of gains -- the longest winning streak since 2018 -- lifted by the conviction that the euro-area interest rates will start to fall in the coming months, Jasani added.
Vaibhav Vidwani, Research Analyst at Bonanza Portfolio, said that as mutual funds started to release the stress test findings, the investors pulled out of the small- and mid-cap equities. Concerns over inflated valuations and the Securities and Exchanges Board of India's (SEBI) scrutiny of mutual funds that serve the industry have caused mid and smallcap stocks to plummet in recent weeks, thus negatively impacting the investor mood.
There has also been a fear regarding the froth building up in the small- and mid-cap mutual fund schemes after the Sebi’s recent advice to the Association of Mutual Funds of India (AMFI), requesting additional disclosures to protect the investor interest. With difficult market conditions, this test attempts to ascertain the earliest possible time for fund managers to liquidate their holdings if investors request redemptions, he said.
