On Wednesday, there's notable selling pressure observed in small cap stocks, leading to a decline in small cap indices, surpassing the benchmark indices' fall.
The BSE Small Cap Select Index dropped by 1%, with stocks like Sonata Software and Suzlon declining by 5%, while KPIT Tech, JSL, and Fortis witnessed drops ranging from 2% to over 4%.
Similarly, the BSE Small Cap Index declined by 0.33%, with companies like Apollo Micro Systems, Orient Green Power, Patel Engineering, Rattan India Power, SEPC, and Jindal Saw experiencing drops between 4% to 5%.
The BSE 250 Small Cap Index also saw a decrease of 0.49%, with Motilal Oswal Financial Services and Raymond showing declines of more than 4%.
Small cap indices have previously outperformed benchmark indices significantly, but the current market trends indicate a shift, with small caps witnessing a sell-off.
V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services, noted that the market range is narrowing, suggesting a potential decrease in sharp market movements. Additionally, the market's attention is on the opening of four Initial Public Offerings (IPOs), with expectations of significant capital inflow towards high-quality offerings like Tata Technology IPO.
Vijayakumar suggested investors focus on accumulating high-quality large-cap stocks, particularly in banking and autos, where there's a perceived higher margin of safety amidst market fluctuations.
(With Agency Inputs)
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