Indian stock market cuts holiday as investors cautious ahead of 2023-24 federal budget scheduled for Feb 1 and Federal Reserve Board results due on Feb 1 down 2% in the week since.
This week, BSE Sensex dropped 1,290.87 points (2.12%) to close at 59,330.9, while Nifty dropped 423.3 points (2.34%) to close at 17,604.35. But the small- and mid-cap index fell further.
The BSE small-cap, mid-cap, and large-cap indices fell 3.5%, 2.6%, and 3%, respectively, this week.
The BSE Small Cap Index fell 3.5%. Kiri Industries, GTL Infrastructure, Dixon Technologies, PC Jeweler, Monarch Networth Capital, Power Mech Projects, Jayant Agro-Organics and KBC Global were down 15-26%.
However, Manaksia, Kabra Extrusion Technik, SVP Global Textiles, Bliss GVS Pharma, Sandur Manganese and Iron Ores, Control Print and Shalimar Paints increased by 9-17%.
The Nifty PSU Banks Index was down 9.6%, the Nifty Energy Index was down 7.5%, the Oil and Gas Index was down 7.4% and the Metals Index was down 6%. However, the Nifty auto index rose by 3%.
Funds have been diverted to other emerging markets, with overseas institutional investors selling at attractive valuations.
Foreign Institutional Investors (FIIs) continued to sell shares this week, selling Rs935.218 billion worth of shares. Support was provided by a Domestic Institutional Investor (DII) to purchase shares worth Rs 7,210.53 crore.
In January, FII sold shares worth Rs 2,923.229 billion and DII bought shares worth Rs 2,339.291 billion. The Federal Reserve was expected to raise interest rates by 50 basis points. A rate cut below that level would be positive.