Sensex and Nifty Witness Sharp Decline
The Indian stock market ended the week on a negative note, with the Sensex and Nifty witnessing their steepest weekly drop in nearly eight months. The Sensex fell 0.9% to 80,426.46, while the Nifty 50 declined 0.95% to 24,654.7. This decline was largely attributed to the US curbs on H-1B visas and high tariff rates on branded drugs, which dampened investor sentiment.
Impact on IT and Pharmaceutical Sectors
The IT and pharmaceutical sectors were among the hardest hit, with the Nifty IT index sinking nearly 8% for the week. This was largely due to the $100,000 fee imposed on new H-1B visas by US President Donald Trump, which is expected to raise operating costs for Indian IT firms. The Nifty Pharma index also witnessed a significant decline, with stocks such as Laurus Labs and Biocon falling over 4.5% for the day.
Broader Market Indices Underperform
The Sensex and Nifty underperformed the broader market indices for the week, with the Nifty Midcap 150 and Nifty Smallcap 250 falling over 4% for the week. As many as 3,100 stocks declined, while 1,041 advanced and 139 remained unchanged on the BSE. Stocks such as Caplin Point, Avanti Feeds, and Redington were among the top losers, falling over 10% for the week.
Opportunities in Small and Mid Caps
Despite the decline in the broader market, some experts believe that small and mid caps offer buying opportunities for investors. According to N ArunaGiri, Founder & CEO at TrustLine Holdings, while benchmark indices like the Nifty may not see a decisive breakout soon, selective opportunities continue to emerge in small- and mid-cap stocks. The recent weakness in these segments has opened up attractive entry points for patient investors who focus on quality businesses.
Caution for Short-Term Traders
However, Amol Athawale, VP Technical Research, Kotak Securities warned that short-term traders should remain cautious and be very selective, as there is a risk of getting trapped at lower levels. A range-bound market with a mild positive bias tends to be the best setup for bottom-up stock picking, especially in the broader small- and mid-cap space.
Conclusion
In conclusion, the Indian stock market witnessed a significant decline on Friday, with the Sensex and Nifty hitting three-week lows. While the IT and pharmaceutical sectors were among the hardest hit, some experts believe that small and mid caps offer buying opportunities for investors. However, short-term traders should remain cautious and be very selective, as there is a risk of getting trapped at lower levels.
As the market continues to evolve, it’s essential for investors to stay informed and adapt to the changing landscape. By keeping a close eye on market trends and being mindful of potential risks, investors can make informed decisions and navigate the complexities of the Indian stock market.
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