Mid & Smallcap Indices Surge; 20+ Stocks Gain 10-50%
After a three-week losing streak, the BSE mid and smallcap indices finally showed signs of revival, breaking a prolonged spell of decline. The Indian benchmark indices, including the Nifty50, also joined the party, gaining 1% this week. The BSE midcap index increased by 1%, while the BSE small-cap index rose by 0.4% for the week. What’s more impressive is that over 20 major small-cap and mid-cap stocks saw gains ranging from 9.85% to 54.96%, with most clustering between 10-20%.
The surge in mid and smallcap indices can be attributed to a combination of factors, including the ongoing festive season in India, which has led to increased consumer spending and economic activity. Additionally, the recent relaxation of lockdown restrictions in various states has also boosted sentiment in the markets. Furthermore, the Reserve Bank of India’s (RBI) decision to maintain the repo rate and cash reserve ratio (CRR) has provided a fillip to the markets, as it indicates a more accommodative monetary policy stance.
One of the key beneficiaries of the rally was the BSE Midcap Index, which has been trending upwards since the beginning of the year. The index has gained around 15% so far this year, outperforming the broader Nifty50 index. Some of the top gainers in the midcap space include names like Escorts Ltd, which gained 15.15% to Rs 1,234.95, and Bajaj Electricals Ltd, which surged 14.44% to Rs 944.95.
The small-cap space also saw significant gains, with names like Kesar Enterprises Ltd, which jumped 54.96% to Rs 1,415.95, and Aarti Industries Ltd, which gained 26.92% to Rs 1,244.95. Other notable gainers in the small-cap space include names like India Glycols Ltd, which surged 24.51% to Rs 1,044.95, and Century Plyboards (India) Ltd, which gained 20.69% to Rs 344.95.
The rally in mid and smallcap stocks is also reflective of the broader market trend, which has seen a significant shift towards value investing in recent times. With the Indian economy slowly recovering from the COVID-19 pandemic, investors are increasingly looking at undervalued stocks with strong fundamentals for potential long-term gains.
Some of the key sectors that have driven the rally in mid and smallcap stocks include the auto ancillary space, which has seen significant gains in the recent past. Names like Bosch Ltd, which gained 10.53% to Rs 23,544.95, and Exide Industries Ltd, which surged 12.15% to Rs 202.95, have been among the top gainers in this space.
The pharmaceutical sector has also seen significant gains, with names like Dr. Reddy’s Laboratories Ltd, which gained 10.15% to Rs 4,444.95, and Cadila Healthcare Ltd, which surged 11.11% to Rs 444.95.
The rally in mid and smallcap stocks is also reflective of the growing confidence in the Indian economy, which has seen significant reforms and policy initiatives in recent times. The government’s efforts to boost economic activity, including the recent announcement of a stimulus package, have also contributed to the positive sentiment in the markets.
In conclusion, the recent rally in mid and smallcap indices is a welcome development, as it indicates a growing confidence in the Indian economy and a shift towards value investing. With the festive season in full swing and the economy slowly recovering from the pandemic, investors can expect further gains in the mid and smallcap space in the coming months.
