Mid & Smallcap Indices Surge; 20+ Stocks Gain 10-50%
After three weeks of consecutive losses, the BSE mid and smallcap indices finally broke their losing streak, with the BSE midcap index increasing by 1% and the BSE small-cap index rising by 0.4% for the week. This turnaround is a welcome relief for investors who had been bearing the brunt of the recent market downturn.
According to a recent report by Investment Guru India, over 20 major small-cap and mid-cap stocks saw impressive gains, ranging from 9.85% to 54.96%. The majority of these stocks, however, saw gains clustered between 10-20%. This surge in mid and smallcap indices is a significant development, as these segments often serve as a bellwether for the overall market.
The rally in mid and smallcap indices can be attributed to a combination of factors. Firstly, the Indian economy has been showing signs of recovery, with the GDP growth rate improving in the second quarter of the current fiscal year. This has led to increased optimism among investors, who are now willing to take on more risk and invest in these segments.
Secondly, the recent monetary policy decisions by the Reserve Bank of India (RBI) have been supportive of the market. The RBI has cut interest rates twice in the last six months, making it cheaper for companies to borrow money and invest in their businesses. This, in turn, has led to an increase in corporate earnings, which has boosted investor confidence.
Thirdly, the government’s efforts to improve the ease of doing business in the country have started to bear fruit. The recent reforms launched by the government, such as the introduction of GST and the increase in FDI limits, have made it easier for companies to operate and expand their business. This has led to an increase in investor interest in these segments.
Some of the stocks that saw significant gains this week include:
- Graphite India, which gained 54.96% after the company reported a significant increase in its profit.
- J&K Bank, which gained 29.51% after the bank reported a significant increase in its profit.
- PNC Infratech, which gained 25.93% after the company reported a significant increase in its profit.
- Dhanlaxmi Bank, which gained 22.22% after the bank reported a significant increase in its profit.
- Aditya Birla Money, which gained 20.48% after the company reported a significant increase in its profit.
These gains are not limited to individual companies; the broader mid and smallcap indices have also seen significant increases. The BSE Midcap Index, which tracks the performance of mid-cap stocks, rose by 1% this week, while the BSE Smallcap Index, which tracks the performance of small-cap stocks, rose by 0.4%.
The surge in mid and smallcap indices is a significant development, as these segments often serve as a bellwether for the overall market. The rally in these indices is a sign that investors are becoming more optimistic about the Indian economy and are willing to take on more risk.
In conclusion, the recent surge in mid and smallcap indices is a welcome development for investors. The gains seen in these segments are a sign that the Indian economy is recovering, and investors are becoming more optimistic about the future. While there are always risks involved in investing in these segments, the recent rally is a clear indication that the Indian market is poised for growth.
