As markets cheer Budget 2017, BSE mid-cap index ends just short of all-time high

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Mumbai | Updated: February 4, 2017 6:19:29 AM

The BSE mid-cap index ended the Friday’s session at 13285.41, just 3% short of its all-time high of 13,713.

In last one year the BSE mid-cap registered a change of 30% as compared to 16.5% that of Sensex. (Reuters)In last one year the BSE mid-cap registered a change of 30% as compared to 16.5% that of Sensex. (Reuters)

The BSE mid-cap index ended the Friday’s session at 13285.41, just 3% short of its all-time high of 13,713.The gauge is touching its peak as markets continue to cheer union government’s budget proposals including its decision to exempt categories 1 and 2 foreign portfolio investors (FPIs) from indirect transfer provisions.

After outperforming the broader market index for the last three years the mid-cap index has risen by 9.6% in the calendar year (CY) 2017 so far against Sensex’s gain of 6.1%.

In last one year the BSE mid-cap registered a change of 30% as compared to 16.5% that of Sensex. Since December 26, the mid-cap index rallied over 15%. During this period stock of Sun TV has reported the biggest gain of 45.33%, followed by Indian Bank which rose by 42.13%, Jindal Steel and Power which rose 39.6%. The share of SAIL and Union Bank rose by 37% each.

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“Most companies in the mid-cap are competing with unorganised sector. Demonetisation has improved the visibility of these companies. For example there are mid-cap companies engaged in businesses like plywood or paint and these sectors are dominated by unorganised sector. Post demonetisation the clientele has shifted from unorganised to organised as the prices have come down. Once GST is introduced, the benefits will be multifold. The mid cap and small cap companies will be able to leverage this migration from unorganised to organised sector,” said AK Prabhakar, head of research IDBI Capital.

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