 "stock broker, markets")
As many as 1,010 stocks were locked at their respective lower circuits on the BSE at 02:32 pm; with only sellers seen at these counters after a sharp sell-off in equities.
Of these 1,010 stocks, more than half or 697 stocks were from the XT (387), T (250), MT (25) and Z (35) segment on the BSE. T group shares are securities that are put into the Trade to Trade segment by the BSE. These stocks are not allowed for intraday trading. The T2T stocks can only be delivery based i.e. the buyer has to take the delivery of these shares.
One97 Communications, the parent firm of Paytm, Adani Power, Suzlon Energy, Tata Investment Corporation, Housing & Urban Development Corporation (HUDCO), MMTC and NBCC (India) were among the 14 stocks from the S&P BSE 500 index locked in the 5 per cent lower circuit.
IRB Infrastructure Developers, Mahanagar Telephone Nigam Limited (MTNL), DB Realty and Hindustan Construction Company (HCC) were locked at the 10 per cent lower circuit.
"Excessive liquidity drove up midcap and smallcap stock prices, often exceeding their justified values based on earnings. The surge in funds flowing into these segments compelled fund managers to invest, further inflating valuations,” said Gaurang Shah, Senior Vice President, Geojit Financial Services.
Authorities have acknowledged the situation and proposed potential regulations. Given the historical volatility of small and midcap stocks, it's crucial for investors to exercise caution in allocating funds, whether directly in stocks or through mutual fund SIPs. Investors should be prepared for the inherent volatility in small, mid, and microcap stocks, as corrective phases have occurred before. Regulatory steps aim to safeguard the interests of small retail investors, Gaurang Shah said.
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Individually, shares of Sterling and Wilson Renewable Energy were locked at lower circuit for the second straight day, down 5 per cent at Rs 514.55. There were reports that Shapoorji Pallonji And Company Private Limited, one of the promoters of the company, may sell its stake in Sterling and Wilson Renewable Energy to manage its debt.
The company however, clarified that the news report is factually incorrect, baseless and misleading. CLICK HERE FOR RELEASE
Shares of HCC were locked at the 10 per cent lower circuit at Rs 32 amid heavy volumes. The stock of civil construction has corrected 33 per cent from its 52-week high level of Rs 47.92 on February 2. The average trading volumes on the counter jumped over three-fold. A combined 32.21 million equity shares changed hands and there were pending sell orders for a combined around 250,000 shares on the NSE and BSE.
