Based on seasonality trends, here are top three small-cap stocks to watch out for in October!

Here are the top three small-cap stocks to watch out for in the month of October

The month of September turned out to be a surprising one for the market! The market, which was moving up with a gush of liquidity by FIIs, witnessed nerve-wracking volatility during the second half of the month as many unexpected and expected events unfolded.   

One of the most notable events of the month was the third jumbo rate hike by US Fed while Wall Street suspects that the rates will rise another 1.25 per cent over the central bank’s remaining two meetings. The king US Dollar also moved above the 114 mark on an intraday basis; however, a big pleasant surprise came in after Bank of England (BoE) unveiled a bond-buying programme.  

In its announcement, BoE mentioned that it will carry out temporary purchases of long-dated UK Government Bonds from September 28. The purpose of these purchases will be to restore orderly market conditions. The purchases will be carried out on whatever scale is necessary to affect this outcome, which would further help improve the sentiment of the market. This shows that the markets worldwide remain at the mercy of their respective central banks.   

Besides, it was great to hear RBI Governor’s commentary on the Indian economy being resilient, withstanding the shocks of the ongoing geopolitical challenges. However, RBI, in its Monetary Policy on Friday, announced a fourth consecutive hike in the repo rate, increasing it by 50 bps to 5.9 per cent, and maintained its stance at 'withdrawal of accommodation'. While we had expected a hike in the repo rate, RBI has lowered the GDP forecast for FY23 to 7 per cent from 7.2 per cent and also, retained the inflation forecast to 6.7 per cent.   

With buying investors witnessed in the last trading session of the month and Nifty jumping over 1.5 per cent, it’s being hinted that October, which is a festive month, could be very interesting! Hence, we have hand-picked the top three stocks from Smallcap index for the month of October, which should be on your radar based on seasonality analysis.     

Here are the top three Small-Cap stocks to watch out for in the month of October:      

Gujarat State Fertilizers & Chemicals Ltd (GSFC): As history goes, the stock, on average, delivered gains of 9.72 per cent with a positivity rate of 80 per cent in the month of October as out of 20, it has ended in green on 16 instances. Interestingly, the stock has witnessed nine consecutive positive years. Hence, keep a close watch on this stock.     

IFB Agro Industries: Historically, the month of October has been excellent for this stock as out of 20, it managed to deliver positive returns on 15 instances thereby, resulting in a 75 per cent positivity rate. Moreover, the average gains registered by this stock in October are 18.22 per cent while the cherry on top is that its maximum returns for the month of October stand at an eye-popping 68.20 per cent.      

Manappuram Finance: If history is to be believed, then it is likely that the stock might deliver robust performance in the month of October as it has closed positively 15 out of the 20 times in the past. The stock’s average return in October is 14.13 per cent.