The Nifty Midcap Index took another hit in Friday’s trading session, dropping over 1,000 points. This marks the fourth time in October that the index has declined by more than 1,000 points in a single session. Adding to this is the 985-point fall seen on October 17. With today’s drop, the index is now down over 6,000 points from its record high of 60,924 reached exactly a month ago on September 24.
Key Insights:
- Out of the 100 constituents of the Nifty Midcap Index, 12 stocks are down more than 20% since September 24.
- Nearly half the index, or 46 stocks, are trading with losses between 10% to 20%.
- 30 stocks have fallen between 1% to 10%, while only 12 stocks have remained in positive territory since the index’s record high.
Major Decliners:
- Vodafone Idea: Down 27% since September 24.
- Indraprastha Gas: Down 25%.
- Cochin Shipyard: Down 25%.
- L&T Finance: Down 24%.
- Bank of Maharashtra: Down 21%.
- Supreme Industries: Down 21%.
- Rail Vikas Nigam Limited (RVNL): Down 20%.
- Suzlon: Down 20%.
- JSW Infrastructure: Down 20%.
Expert Commentary:
Laurence Balanco from CLSA mentioned earlier this week that there is a strong probability of the Nifty 50 testing its 200-Day Moving Average, which is currently around 23,300 levels. This marks a 1,000-point fall from where the index was when he first made those remarks.
He also highlighted the PSU space as being at high risk, specifically mentioning stocks like Coal India and Power Finance Corporation as having downside potential.
Market veteran Raamdeo Agrawal of Motilal Oswal referred to this sharp decline as the ‘healthiest possible correction,’ suggesting that the recent pullback is a necessary reset in an overheated market.
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