Feverish trading in newly listed and high-momentum stocks has reached dangerous levels

FPJ News Service mumbai

India’s stock markets tumbled on Friday as weakening global cues and fading hopes of a Federal Reserve rate cut sent investors fleeing for cover. Risk appetite, according to market gurus, is seen evaporating, leaving indices in freefall, and high volatility.

Experts are sounding the alarm: feverish trading in newly listed and high-momentum stocks has reached dangerous levels. Dr V.K. Vijayakumar, Chief Investment Strategist at Geojit Investments, warns bluntly: “Retail investors chasing momentum are almost certain to end in tears.”

The BSE Sensex dropped 400.76 points to 85,231.92, while the NSE Nifty fell 124 points to 26,068.15. Mid- and small-cap stocks were hit hardest, exposing the fragility of riskier bets. “Stronger-than-expected US non-farm payrolls erased hopes of a December rate cut, amplifying caution. A soft domestic manufacturing PMI, a weakening rupee, and uncertainty over India–US trade talks compounded the pressure,” analysts said.

The Nasdaq plunged 2.15% on Thursday, wiping 4.4% off intraday gains, a stark warning for global AI trade. Overvaluation concerns persist, though Nvidia’s CEO insists that advanced AI systems are on a sustainable growth path. Analysts predict retracements may spark selective buying, but only for the disciplined.

“Profit-booking after a brief two-day uptrend added to the cautious tone, pulling all key indices into the red, with mid- and small-caps facing sharper corrections. Market sentiment was further undermined by a soft manufacturing PMI reading, a weakening INR, and growing worries over potential delays in India–US trade discussions,” said Vinod Nair, Head of Research at Geojit Investments.

Dr Vijayakumar advises: “Focus on high-quality, fairly valued stocks. Accumulate on dips. Avoid chasing momentum. India’s relative underperformance in the global AI trade could turn into an advantage—but a major global correction would hit indiscriminately.”