The Hindu Business Line : Small, mid-cap stocks jump on value buying

Mumbai, Nov. 15 Small and mid-cap stocks do not seem to be missing out on the run up along with the benchmark index. They too are reaching new heights. The BSE Small-Cap Index touched 10,000 for the first time to close at 10,039.38 yesterday.

Today, we saw them both up almost 2 per cent. The BSE Midcap was up 1.55 per cent to close at 8414.09, whereas the BSE Small Cap was up 1.88 per cent closing at 10227.66. Even the CNX Midcap was up 2.17 per cent ending the day at 7855.25. “The traders are on a free run, so the obvious choice seems to be the small and mid-cap stocks. They seem to be moving much better than the larger stocks these days,” said the Head of Equities with a brokerage.

Momentum shift

Many analysts are of the belief that the larger cap stocks have outperformed and investors are looking out for fresher and better avenues to invest their money in. “We are seeing a momentum shift towards the smaller stocks, with their valuations sort of catching up with the larger cap stocks,” said Ms Shahina Mukadam, Head Research, IDBI Capital Market Service Ltd.

Mr Gopal Agarwal, Senior Fund Manager, Mirae Asset Global, said that the valuation gap has been bridged between the larger and smaller cap stocks. “There has been a lot of valuation difference between these two sectors, especially after September 18, where we saw the larger cap stocks outperforming. Now the smaller and mid-cap stocks seem to be catching up and slowly the gap is getting bridged. The mid and small-cap stocks also have shown robust results in the past quarter, which have increased investor interest,” said Mr Agarwal.

There are some new fund offers from mutual fund houses that cater to the smaller stocks, such as the new HSBC fund; but these are early days as there are not many that cater just to them as of now. As for the new fund offers specially catering to the smaller stocks, analysts say that they cannot be accounted to be the sole reason why they are on the up-swing. “The universe of the small and mid cap stocks are so huge that just a single NFO wouldn’t be enough to give them such a big push up,” said the Head of Equities of brokerage.

More Stories on : Stocks | Stock Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page