Nifty Smallcap 250 up over 10% in November, outperforms Nifty 50’s turnaround

In addition, both Nifty Smallcap 250 and Nifty Midcap 150 indices have outperformed the other indices when compared on a three-month, six-month, and on an annual basis. In the last three months, Nifty Midcap rose 8.64 per cent and Nifty Smallcap 250 was up 11.07 per cent.

Also Read: Down 4%, Nifty Midcap 150 declines more than Nifty 50 in October on global headwinds

In the last six months, both indices have clocked gains of 26.46 per cent and 33.68 per cent, respectively. Finally, even on a 12-month basis, both indices rose 32 per cent and 37.31 per cent, respectively – clocking the highest gains when compared to other major indices including Nifty 50 and Nifty 500, according to Motilal Oswal.

In November 2023, the Indian stock markets experienced a notable upturn, as evidenced by around 6 per cent surge in the Nifty 50 index. The Smallcap 250 index outperformed, leading the gains with an impressive growth of 10 per cent.

Across the board, all sector indices closed the month on a positive note. The realty sector emerged as the top performer, witnessing a substantial increase of around 18 per cent. Following a month of negative returns in factor-based indices, November marked a remarkable turnaround, with all factor-based indices experiencing notable increases.

Momentum emerged as the frontrunner, registering the highest rise at around 12 per cent during the month. The Financial Services sector continued to play a pivotal role in propelling the Nifty 500 index, contributing significantly to its overall 7.1 per cent increase in November 2023.

What drove the rally in November?

-Goods and services tax (GST) revenue collection rose 15 per cent in November 2023. According to the Ministry of Finance, this is the highest annual growth in monthly GST collections and amounted to ₹1.68 lakh crore

-The Indian economy grew 7.6 per cent during the July-September quarter of fiscal 2023-24 (Q2FY24), remaining the fastest-growing major economy in the world. India’s Q2 GDP growth came sharply above D-Street estimates as well as projections by the Reserve Bank of India.

-At the last Federal Reserve Open Committee (FOMC) meeting, the Federal Reserve maintained interest rates at 5.50 per cent and may not hike rates anytime soon, showing confidence in the US economy despite high inflation. 

Also Read: RBI likely to continue with hawkish stance after Q2 GDP shoots above estimates; Here’s what experts say

-The US market showed almost 10 per cent rallies only in the month of November. US 10-year bond yields and the dollar index are also cooling off, which gives strength to the market. These factors will be closely monitored, as they have the potential to influence market sentiment.

-Foreign institutional investors and foreign portfolio investors (FPIs) snapped their two-month selling streak and pumped in Indian equities last month. The net inflow by FPIs stood at ₹9,001 crore, compared to over ₹39,000 crore worth of shares sold in September and October together.

Global Markets

-In the US, S&P 500 and NASDAQ 100 both experienced a around nine per cent and 11 per cent gains in November 2023, with the IT & Financial Services sector being the largest contributor to the S&P 500’s rise.

-Globally, both emerging and developed markets saw positive performance, rising by around nine per cent and eight per cent, respectively. South Korea witnessed the most significant rise around 16 per cent followed closely by Germany & Taiwan rising by around 13 per cent.

Also Read: RBI MPC Policy: Interest cycle has peaked, rate cuts unlikely before June 2024, says Deutsche Bank

-Crude oil prices nosedived by around 6 per cent during November, due to rising geo-political risks, low demand from the US and mixed Chinese data.

-On the commodities front, precious metals were in the green with gold and silver prices rising by two per cent and eight per cent respectively, amid rising tensions in the middle east. Cryptocurrencies such as Bitcoin and Ethereum went soaring at nine per cent and 13 per cent, respectively.

Technical View

Ajit Mishra, SVP – Technical Research, Religare Broking Ltd said, ‘’Markets extended gains for the seventh session in a row and rose nearly half a percent. After the initial uptick, Nifty hovered in a range till the end and finally settled around the upper band of the same at 20,937.65 level.”

‘’Noticeable traction in the key sectors is fuelling momentum in the index however we can’t ignore the possibility of some consolidation now. Traders should maintain their focus on stock selection as we are seeing a catch-up move in the sectors and stocks that were on the sidelines in recent months. Also, avoid contrarian bets in anticipation of a major decline,” added Mishra.

Disclaimer: The views and recommendations given in this article are those of individual analysts. These do not represent the views of Mint. We advise investors to check with certified experts before taking any investment decisions.

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Published: 06 Dec 2023, 08:57 PM IST