Along with the large cap stocks which enjoy the fruits of liquidity pumped in by foreign institutional investors (FIIs), and the Sensex which scaled a new high in the shortest time-span as a result, the small- and mid-cap indices of the Bombay Stock Exchange (BSE) also have touched new highs on Monday.
High liquidity and room for growth boosted the small- and mid-cap indices of the BSE to touch a 52-week high on Monday. The BSE small?cap index closed the day at 9,184.52 points, gaining 84.59 points, or 0.93%, while the BSE mid?cap index closed the day at 7,528.64 points, jumping 106.21 points, or 1.43%.
Mihir Vora, senior vice president and head of equities, HSBC Asset Management company (AMC), said, ?The small- and mid-cap indices have been underperforming for quite some time now. Money, both from the FIIs and domestic institutions, is now finding its way into small- and mid-cap companies, thus making it look attractive for investments.?
The US Fed announced its rate cuts on September 19, but the run-up in the Sensex started from September 18 itself. The Sensex since then has gained 1,659.50 points, or 10.59%, while the BSE small cap index has gone up by 4.59% or has gained 403.63 points, and the BSE mid-cap has risen by 7.78%, or 543.61 points.
Another fund manager said that the next bull run will be witnessed in the small and mid-cap space. ?At the end of the day, there is a limit to how much can one invest in the large cap stocks.
The steam will run out in high profile companies in the large cap space and the action will be seen in small and mid cap companies as there seems to be more room for growth,? he said.
