Nifty Stagnates in a Tight Range as Smallcaps Tumble Up to 42%

Broader Market Under Pressure Amid Continued FII Selling

Mumbai, India – The Indian equity market remained subdued in the week ended March 13, as the Nifty50 index stayed range-bound, and smallcap stocks experienced heavy selling pressure, falling as much as 42%. The market sentiment remained weak, driven by persistent Foreign Institutional Investor (FII) outflows and a cautious approach from domestic investors.

Market Performance Overview

• The BSE Sensex fell 503.67 points or 0.67% to close at 73,828.91.
• The Nifty50 declined 155.3 points or 0.68% to settle at 22,397.20.
• Broader market indices faced sharper declines:
  • BSE Large-cap Index fell 0.8%.
  • BSE Mid-cap Index dropped 2%.
  • BSE Small-cap Index plunged nearly 4%.

Heavy Selling in Smallcap Stocks

A total of 116 smallcap stocks witnessed significant losses, tumbling between 10-42% during the week. Notable losers included:

• KR Rail Engineering
• Gensol Engineering
• EKI Energy Services
• Max Estates
• Orchid Pharma
• Jai Corp
• Senco Gold
• Geojit Financial Services

Conversely, a few smallcap stocks bucked the trend, gaining between 10-31%, such as:

• NACL Industries
• Kolte-Patil Developers
• Carysil
• Sarda Energy and Minerals
• Krishna Institute of Medical Sciences
• PC Jeweller

Sectoral Indices: IT and PSU Banks Take the Biggest Hit

All sectoral indices ended in the red, with the Nifty IT, Nifty Media, and Nifty PSU Bank indices witnessing the steepest declines.

• Nifty IT Index: Down 4.5%, hit by weak global cues and reduced earnings growth outlook.
• Nifty Media Index: Dropped 3.4% as investors exited media stocks amid sector-wide volatility.
• Nifty PSU Bank Index: Fell 2.5% as profit booking and concerns over banking liquidity weighed on sentiment.
• Nifty Auto & Realty Indices: Both lost 2%, reflecting concerns over demand slowdown and high-interest rates.

FII Selling Continues for the Sixth Consecutive Month

Foreign Institutional Investors (FIIs) remained net sellers for the sixth consecutive month, offloading ₹21,231.25 crore worth of equities in March alone.

• FIIs dumped ₹5,729.68 crore worth of stocks in the past week, further pressuring markets.
• Domestic Institutional Investors (DIIs) attempted to offset this trend, purchasing ₹5,499.47 crore worth of equities.

Despite DII support, the continued FII exodus has kept market sentiment fragile, contributing to broader weakness across indices.

Nifty’s Direction Remains Unclear

Range-Bound Trade with a Negative Bias

According to Amol Athawale, VP-Technical Research at Kotak Securities, the market has been trading within a narrow range and lacks a clear directional breakout.

“In the last week, benchmark indices witnessed range-bound activity. Nifty ended 0.69% lower, while the Sensex fell 500 points. The market continues to trade in a non-directional pattern, struggling between 22,300/73,300 support levels and 22,650/74,900 resistance levels.”