Spotlight Shifts To Blue Chips From Mid-caps

New Delhi, Nov 6: | Updated: Nov 7 2003, 05:30am hrs
Blue chips have taken the spotlight away from their mid-cap peers as the BSE Sensex shot past the 5,000-point mark on November 3. Mid-cap stocks, which had led the way during the Sensex rally from 3,000-points in mid-May to 4,000-points in mid-August, have been overtaken by heavyweights during the next 1,000-point rally in the Sensex.

As against a 26 per cent surge in Sensex between 4,000 to 5,000 points, The Stock Exchange, Mumbais (BSE) broadbased indicesBSE 100, BSE 200 and BSE 500have gained 21-22 per cent.

This is as against a 36-39 per cent jump in these indices while the Sensex gained 33 per cent during its 3,000-4,000 point run between May 15 and August 19.

The BSEs 100, 200 and 500 indices are broadbased and represent stocks with smaller market capitalisation than the frontline bluechip stocks. Stocks like ONGC, Indian Oil, Steel Authority, Bharti Televentures, Gail,

Maruti Udyog, Neyveli Lignite and Bharat Petroleum, which do not find representation in the Sensex enjoy higher weightage in these broadbased indices.

On the National Stock Exchange (NSE), too, the 50-share benchmark Nifty spurted 25.35 per cent, while the CNX Midcap 200 index underperformed the former, gaining 20.66 per cent between mid-Aug and early November. As against this, the gains in the Mid-cap index was sharper at about 40 per cent as against 33 per cent rise in Nifty as the BSE Sensex rallied from 3,000 points to 4,000 points.

According to a Delhi-based NSE broker, Mid-caps have been on a rise due to lower valuation of these stocks, better financial results and high dividends they declared. Lately, however, the rally has become stock-specific and centred around the frontline stocks.

An online broking source added, The rally has been fuelled by foreign institutional investors (FIIs) who have been pumping in money into the Indian markets.

FIIs do not invest heavily in the mid-cap stocks due to lack of liquidity on these counters. As a result, many of these stocks have underperformed the benchmark indices.

During the Sensex journey from 4,000-point to the 5,000-point mark, BSEs FMCG index has gained by a mere 2.43 per cent. BSEs consumer durables index and PSU index have also underperformed the Sensex with just 13 per cent gains each.

Technology indices have seen a sharp jump during the Sensex journey from 4,000 to the 5,000-point mark, thanks to the impressive quarterly results.

BSEs IT index has shot up over 45 per cent during the period, while the BSEs TECk index has surged 38.43 per cent as against the 26 per cent rise in the Sensex.

These stocks had a bad run during the first half of the 2,000-point Sensex rally, gaining a mere 11.52 per cent and 24 per cent respectively during that period.