Sensex, Nifty fall 1% as mid, small-caps rise :

Today’s stock market: On May 13, the Indian stock market displayed a mixed pattern, with mid- and small-cap indexes rising by 1% and benchmark indices Sensex and Nifty 50 down by 1%.

Stock market today: On Tuesday, May 13, intraday trading on the Indian stock market showed a mixed pattern. Mid- and small-cap indices rose 1% while the main indices, the Sensex and the Nifty 50, declined 1%.

Also Read : 3 reasons markets surged: big Sensex, Nifty gains :

The Sensex plummeted to an intraday low of 81,336—a drop of more than 1,000 points, or 1%. During the session, the NSE’s equivalent, the Nifty 50, too plummeted more than 1% to an intraday low of 24,635 points. However, the BSE Midcap and Smallcap indices rose by as much as 1% during the session, defying the benchmarks’ weakness.

What is causing the broader market and benchmarks to move in separate directions?
The ongoing inflow of retail capital may be a major factor in the outperformance of the overall market, while institutional investors are booking profits in large-cap stocks due to a dearth of new catalysts.

“Retail participation is largely responsible for the current divergence in market developments. In the previous session, the rapid rebound was mostly driven by short covering, while retail investors and high-net-worth individuals (HNIs) likely added to the momentum,” said VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited.

Vijayakumar emphasized that retail participants frequently scramble to join the rally when the market jumps,as it did on Monday. On the other hand,people often become anxious when being corrected.

“The SIP stoppage ratio increased in April,suggesting that many retail investors put their systematic investing plans on hold due to increased market volatility. According to Vijayakumar,”many retail investors who joined the markets following the COVID-19 crash still don’t fully comprehend what fair market valuations are,which could be affecting their short-term investing behavior.”

Experts emphasize that the US-China trade agreement and the India-Pakistan development may be the foundation for retail investors’ optimism. A deal between the US and China could hurt the domestic economy, even though the truce between India and Pakistan is a good thing.

In the near future, the local market might continue to be strong, but the US-China trade agreement is a significant problem.“This might lead to another sell India,buy China trend,”Vijayakumar stated.

Equinomics Research Private Limited’s founder and chief researcher,G Chokkalingam,shares these opinions.

“After the US-China trade agreement and the truce between India and Pakistan,retail money may be fueling the rise in mid- and small-cap categories. The US-China deal, however, would have a negative impact on Indian markets since it might lead foreign portfolio investors (FPIs) to shift their money to China, which would decrease inflows into Indian stocks, according to Chokkalingam.

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