The Nifty Junior index, which represents the smaller M-Cap stocks on the National Stock Exchange (NSE), has comprehensively outperformed the benchmark top-50 share Nifty index during the period January 1-21, 2003. While the Nifty has slipped by 0.22 per cent, the Nifty Junior has surged 4.81 per cent during the period. The 4.29 per cent gain in the CNX Midcap 200 index also indicate higher gains in midcap stocks during the period.
The major constituents of Nifty Junior index, including Corporation Bank, CMC, Bank of Baroda, Bank of India, Siemens and Bharat Electronics have spurted up to 32 per cent during the period. Banking stocks were the major drivers of this rally, followed by public sector stocks.
A Delhi-based NSE broker, The result season has been the major reason for the rally in many small-cap stocks. Banks have been coming out with good quarterly results one after the other. On the contrary, the results from certain heavyweights like Infosys and Wipro have not gone down well with the markets. He added that many of the second-line stocks have also remained undervalued and thus an upward movement was due, specially since the heavyweights had surged in the last two months of 2002. Corporation Bank, which enjoys a weightage of 6.27 per cent in Nifty Junior index, surged 31.8 per cent to close at Rs 161.85 on Tuesday. In fact, on Tuesday alone the stock zoomed 10.33 per cent over its previous days close on a robust growth in net profits.
Bank of India gained 24.38 per cent during the period to close at Rs 45.4 as against Rs 36.5 on January 1. The stock has a 5.98 per cent weightage in the index and enjoy a M-Cap of over 2,198.61 crore as on Tuesday. Bank of Baroda also surged 10 per cent to close at Rs 81.85 on Tuesday among banking sector stocks.
Among PSU stocks Bharat Electronics surged 7.81 per cent during the period to close at Rs 186.4. Tata Groups technology company, CMC, has also spurted 13.37 per cent since January 1 to close at Rs 585.2 as against Rs 516.2 on close on January 1.