Small and mid-cap stocks on BSE have given handsome returns of up to 27 per cent to investors so far this year, outshining their large peers.
While the mid-cap index soared 2,767.11 points or 23 per cent, gains were sharper for the small-cap index which recorded a surge of 3,326.38 points or 27.61 per cent, shows an analysis of their performance so far this year.
On the other hand, the 30-share bluechip index Sensex has gained 3,291.94 points or 12.36 per cent. The index hit an all-time high of 30,184.22 on Thursday.
As for the mid-cap index, it scaled a record high of 14,849.66 on Wednesday and small-cap index 15,486.40 level on the same day as well.
Also, total foreign inflow has reached Rs 91,385 crore (USD 14 billion) so far this year in the capital markets (equity and debt).
“A rally in midcap stocks raises confidence among aspirational small-cap and mid-cap companies that they too may get good valuation riding on investor appetite for such papers,” said Paras Bothra, President – Equity Research, Ashika Stock Broking.
Market experts say smaller stocks are generally bought by local investors, while overseas investors go for blue-chips.
The mid-cap index tracks companies with a market value that is on an average one-fifth of blue-chips or large firms. Small-cap firms are almost a tenth of that.
“Political outcomes in European elections and geo- political tensions escalating will keep things interesting on the global news flow side, while monsoon panning out should keep us on our toes domestically,” Kunj Bansal, Executive Director & CIO – Equity, Centrum Wealth Management has said.