Muthoot Finance, BEL to MCX: 19 Nifty 500 stocks hit 1-year highs this week amid geopolitical uncertainty

Stock market today: The Indian stock market remained range-bound this week as tensions in West Asia continued to keep investor sentiment fragile toward risky assets. The conflict between Iran and Israel, which showed no signs of de-escalation as it entered its eighth day, has pushed crude oil prices higher and dampened sentiment in India.

Crude prices jumped nearly 3% on Thursday after Israel reportedly bombed nuclear targets in Iran, prompting retaliatory missile and drone strikes by Iran, including an attack on an Israeli hospital overnight. With prices staying elevated, crude is set to end the week with healthy gains, marking its third straight weekly advance.

Meanwhile, all eyes are on the White House as President Donald Trump weighs launching direct military strikes on Iran, with a decision expected within two weeks. In response, Russia has warned the United States against taking military action, adding to the geopolitical uncertainty.

While the heightening geopolitical tensions keep the markets wary, the lack of domestic triggers has also failed to provide fresh momentum for the bulls. Meanwhile, rich valuations in the mid- and small-cap segments have raised caution among investors, resulting in sharp corrections over the past few sessions.

Foreign portfolio inflows have also been unsupportive, fluctuating throughout the week. While domestic institutional investors have offered some support, it hasn't been enough to lift the markets decisively higher.

Muthoot Finance, Manappuram Finance, and Bharat Electronics scale new 1-year peaks

Amid ongoing market volatility, 19 stocks from the Nifty 500 index managed to touch fresh 52-week highs this week. Notably, most of these names came from the mid- and small-cap segments, outperforming the broader market.

NBFC stocks have led the rally, boosted by the RBI's surprise 50 basis point cut in the repo rate and a 100-basis point reduction in the CRR. This has improved investor sentiment, with expectations that enhanced system liquidity will drive a sharp uptick in vehicle loans. Additionally, the hike in loan-to-value (LTV) ratio for gold loans has fueled a rally in gold-focused NBFCs.

Select defence and pharma stocks have also continued their upward momentum. In the previous trading session, NBFC stocks like Muthoot Finance, Authum Investment & Infrastructure, Aditya Birla Capital, and Max Financial Services hit their respective 52-week highs.

Other stocks that touched their one-year peaks this week include Navin Fluorine, MCX, Redington, defense majors like Bharat Electronics and Solar Industries, as well as Lloyds Metals & Energy, Max Healthcare, Karur Vysya Bank, Intellect Design Arena, Laurus Labs, JK Cement, The Ramco Cements, and Manappuram Finance.

A market reversal is likely only if tensions in the Middle East ease, says expert

Dr. VK Vijayakumar, Chief Investment Strategist, Geojit Investments Limited, said, “Nifty, which has been trading within the 24500-25000 range for about a month now, is likely to remain within this range in the near term. The upper side of the range will be broken only on news of de-escalation of the Israel-Iran conflict or an abrupt end to the war.”

There is uncertainty on this. The lower side of the range is unlikely to break since big buying, particularly by domestic institutions, will emerge on dips. If the war lingers and crude rises beyond $85, the lower band of the range will be broken.

"A distinct feature of the market trend visible in yesterday’s trade was the weakness in the broader market. While Nifty remained almost flat, SMIDs cracked, with the small-cap index correcting sharply by 2%. This trend of weakness in the broader market is likely to continue since they are excessively valued, and the ongoing risk-off can lead to further selling in this segment. Money may move from the overvalued SMIDs to the fairly valued, safe large caps in financials, industrials, autos, and real estate," he further added.

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.