Updated March 15th, 2024 at 08:56 IST

Shares set to open flat as focus shifts to small and mid-cap fund stress tests

The GIFT Nifty is currently trading at 22,144, indicating a similar opening for the Nifty 50 as compared to Thursday's closing of 21,146.65.

Reported by: Business Desk
Stock market news | Image:Republic
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Stocks await stress test: Stocks are expected to open with little change today, as investors await the results of stress tests on small and mid-cap mutual funds amidst concerns about excess in these sectors. Meanwhile, global markets have dipped due to apprehensions about future interest rate hikes in the US.

The GIFT Nifty is currently trading at 22,144, indicating a similar opening for the Nifty 50 as compared to Thursday's closing of 21,146.65.

Asian markets have experienced a decline, with the MSCI Asia ex-Japan losing 1.1 per cent. Wall Street also closed lower following reports of higher-than-expected US producer price index inflation in February.

This data, coupled with earlier consumer inflation figures, has raised concerns about potential delays in interest rate cuts by the Federal Reserve this year.

Indexes decline after peaks

India's major indexes, the Nifty 50 and Sensex, have seen a 1.5 per cent decrease this week due to profit booking after reaching record highs on March 7.

The smaller, domestically-focused small and mid-cap stocks have experienced losses of about 6 per cent and 4 per cent respectively over the past four sessions, after regulatory warnings about possible excesses in these segments.

Investors are keenly awaiting the results of stress tests on small and mid-cap mutual funds to assess their ability to handle sudden redemption pressures.

Small and mid-cap stocks have declined by 11.4 per cent and 5.8 per cent respectively from their peak levels on February 8, in contrast to a 2 per cent rise in the Nifty 50.

According to analysts at Kotak Institutional Equities, many of these stocks are overvalued, and there is still significant downside potential for low-quality stocks.

On Thursday, foreign portfolio investors sold Indian shares worth Rs 13.56 billion, while domestic institutional investors bought stocks worth Rs 1.39 billion.

Stocks to watch today include Bharat Petroleum Corporation, Hindustan Petroleum Corporation, and Indian Oil Corporation, which have announced a Rs 2 per litre reduction in petrol and diesel prices effective from Friday.

Additionally, One 97 Communications has been granted a third-party application provider license by the country's payments authority, enabling it to facilitate payments following the cessation of operations by its banking unit.

Railtel Corporation of India has received a work order worth Rs 1.13 billion for a network connectivity project in Odisha.

(With Reuters Inputs)

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Published March 15th, 2024 at 08:54 IST