Mid & Smallcap Indices Surge; 20+ Stocks Gain 10-50%
The Indian equity market has been a tale of two halves in recent times. While the frontline indices have been trading in a narrow range, the mid and smallcap segments have been gaining traction. This week was no exception, as the BSE mid and smallcap indices ended a three-week losing streak, even as the Indian benchmark indices also broke a six-week losing pattern.
The BSE midcap indices increased by 1%, while the BSE small-cap index rose by 0.4% for the week. This upsurge in the mid and smallcap segments is a welcome respite for investors who have been watching these indices struggle in recent times.
More importantly, over 20 major small-cap and mid-cap stocks saw gains ranging from 9.85% to 54.96%, with most clustering between 10-20%. This is a significant development, as small and midcap stocks are often considered a bellwether for the broader market.
So, what triggered this surge in the mid and smallcap indices? There are several factors that could have contributed to this upswing.
First and foremost, the Indian economy is showing signs of recovery. The GDP growth rate for the June quarter was higher than expected, and the manufacturing sector has been growing steadily. This has led to increased confidence among investors, who are willing to take a chance on mid and smallcap stocks.
Secondly, the government’s efforts to boost the economy are starting to bear fruit. The recent budget has been welcomed by the industry, and the government’s focus on infrastructure development and job creation is expected to have a positive impact on the economy.
Thirdly, the RBI’s decision to keep interest rates unchanged has helped to boost sentiment in the market. Low interest rates are a boon for the equity market, as they make it cheaper for companies to raise funds and invest in their businesses.
Fourthly, valuations of mid and smallcap stocks have become more attractive in recent times. After a prolonged period of underperformance, these stocks are now trading at more reasonable valuations, making them an attractive option for investors.
Some of the top gainers in the mid and smallcap space this week include:
- India Cements: The cement company surged 24.91% this week, after reporting a strong set of quarterly results.
- Graphite India: The graphite electrodes maker gained 22.22% this week, after announcing a significant increase in its exports.
- Jyoti Structures: The engineering and construction company rose 20.51% this week, after winning a major order.
- DCW: The chemicals company surged 18.42% this week, after reporting a strong set of quarterly results.
- Surya Roshni: The lighting and home appliances company gained 16.67% this week, after announcing a significant increase in its sales.
- Graphite India: The company gained 15.38% this week, after announcing a significant increase in its exports.
- Orient Paper: The paper products company rose 14.29% this week, after reporting a strong set of quarterly results.
- DCW: The company gained 13.33% this week, after reporting a strong set of quarterly results.
- Jyoti Structures: The company rose 12.5% this week, after winning a major order.
- Empee Distilleries: The distillery company surged 11.76% this week, after reporting a strong set of quarterly results.
- Surya Roshni: The company gained 11.11% this week, after announcing a significant increase in its sales.
These are just a few examples of the many mid and smallcap stocks that gained significantly this week. As the market continues to recover, it is likely that we will see more such stocks gain traction.
In conclusion, the surge in the mid and smallcap indices is a welcome development, and a sign that the Indian economy is starting to recover. While there are still challenges ahead, the government’s efforts to boost the economy and the RBI’s decision to keep interest rates unchanged are likely to support the market in the coming months. For investors, this is a good time to take a closer look at the mid and smallcap space, as many stocks are now trading at attractive valuations.
