The overall market sentiments remained downbeat in the ongoing calendar year 2015 as the benchmark index BSE Sensex plunged over 7 per cent till December 16. On the other hand, midcap stocks remained in the limelight as they continued to outperform benchmark indices and small cap stocks as well. The BSE Midcap index gained 3.57 per cent, while the BSE Smallcap index gained 2.50 per cent during the same period.
During the previous calendar year, the BSE Sensex, BSE Smallcap index and BSE Midcap index gained 30 per cent, 69 per cent and 55 per cent, respectively.
Several factors such as China yuan devaluation, bleak corporate earnings, foreign money outflows, weak rupee, concerns over the passage of the Goods and Service Tax (GST) and rate hike by the US Fed Reserve dampened overall market sentiments this year.
G Chokkalingam, founder and managing director, Equinomics Research & Advisory said, “ Midcap stocks outperformed benchmark indices due to fall in crude prices and foreign money inflows. Crude oil prices are significant for most of the midcap because they consume crude as a key raw material.”
He further added FII money outflow from large cap stocks in the past six months kept blue chips under pressure. He believes midcap stocks are likely to outperform for another two quarters and investors can invest in companies, which consume crude as a key input.
There are around 270 midcap stocks listed on exchanges. Out of them, stocks such as RISA International, Amtek Auto, Unitech, Oriental Bank of Commerce, Aban Offshore retreated 99 per cent, 74 per cent, 61 per cent, 60 per cent and 58 per cent, respectively, during the year and stood among the list of top losers. Shares of NBFCs like PTC India Financial Services, Mahindra & Mahindra Financial Services and L&T Finance Holdings slid 46 per cent, 28 per cent and 5 per cent, respectively.
Morgan Stanley in a research report said, “We expect continued lackluster earnings growth at midcap NBFCs in 2016 and further downside to stocks. We expect fundamentals to weaken in 2016 after relatively good 2015 and see limited upside in stocks.”
Among major gainers, Rajesh Exports, Jubilant Life Sciences, Welspun India, Godfrey Phillips India and KRBL surged 380 per cent, 252 per cent, 140 per cent, 134 per cent and 120 per cent, respectively and remained amongst top midcap gainers in 2015 till December 16.
For the year 2016, Vaibhav Agrawal, vice president and head of research, Angel Broking said, “From a bottom-up perspective, we continue to like select emerging midcap companies with strong brands, entrepreneurial success and healthy growth outlook.”