The Hindu Business Line : Mid, small-cap stocks maintain momentum

Mumbai, Dec. 10 Mid- and small-cap stocks maintained their momentum and outperformed the benchmark index due to buying interest by the investors. The BSE-Midcap was up by 1.06 per cent to end the day at 9117.44.

The BSE-Small-cap surged ahead 188.65 points to close the day at 11530.92. Strong buying in both these segments kept the market breadth positive, with 2061 stocks advancing and 805 stocks declining.

Some of the major gainers in the mid-cap sector include Provogue India, Essar Shipping, Tata Teleservices and India Infoline.

The major gainers in the small-cap segment were Rain Commodities, Lanco Industries, Euro Ceramics and Inox Leisure.

Marketmen say that this is because these segments at the moment seem to have better valuations than the frontliners.

“The valuations of these stocks seem to be more attractive now. They gave good first and second quarter results and are expected to give good results for the current quarter, which would be out in January,” said Mr Sanjay Someshwar, Sub-Broker, Ventura Securities.

Mr R. Balagopal, Senior Vice-President, Fedex Securities, says that the prices of the frontline stocks have become some what steady and seem to have peaked out, so now the investors are looking at the small and mid-cap segments, where there seems to be immense potential.

growth plans

Analysts also believe that there are many emerging stories that seem to attract investor attention towards these sectors. “There seems to be a strong growth in these sectors, where these smaller companies are coming up with some aggressive growth plans, with some good amount of capital expenditure investment. Another reason is that these companies have been in the news for quite some time. People seem to be wanting to invest their money in newer ideas,” said Ms Shahina Mukadam, Head Research, IDBI Capital Market Services Ltd. Smaller refineries, steel companies, cement, tile companies, real estate, banks, oil, the valuations are better across the board in both the small and mid-cap segments added Mr Someshwar.

“There has been a good amount of participation from the HNIs, domestic institutions and a fairly good level of participation by the retail investors in these sectors, though the FIIs don’t seem to be aggressively taking part,” said Mr S. Krishankumar, Fund Manager and Head Research, Sundaram BNP Paribas Asset Management Company Ltd.

Analysts say that this rally in both the small-cap and mid-cap stocks will continue for some time to come. They believe that this rally will continue into to the New Year as well.

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