It is not just the blue-chips making noise, the mid and smallcap stocks are turning heads on Dalal Street today. As tensions between India and Pakistan cool down and global trade negotiations make progress, investor mood has shifted dramatically.
While the Sensex shot past the 81,000 mark and Nifty scaled above 24,600, the real stars of the day are the BSE Midcap and Smallcap indices.
By early afternoon trade, the Midcap index jumped 1,300 or 3%, while the Smallcap index surged by around 1,700 points or 3.6%.
Midcap movers: Leading the charge
The BSE Midcap index saw a strong rally today, driven by strong gains in several key stocks. The shares of FirstCry emerged as the top performer with a 8.5% up. Following closely were NAM India, which increased 7.5%, and Escorts, a 7.4% gain.
Moreover, Infrastructure player RVNL also had a strong outing, rising by 6.8%, while renewable energy major Suzlon continued its upward momentum with a 6.4% jump.
Smallcap stars: Double-digit surge
In the smallcap space, several stocks recorded intraday gains, with Birla Corporation leading the rally with a full 20% jump. Close on its heels was IFGL Refractories, which surged 19.8%. Punjab Chemicals rose 14.1%, followed by KPEL, which gained 11.9%, and cybersecurity firm Quick Heal, up by 11.8%.
Four reasons why small and midcaps are surging today-
India – Pakistan ceasefire
After nearly three weeks of cross-border violence, the first quiet night between India and Pakistan brought a sigh of relief to markets. The ceasefire, though fragile, indicates a pause in hostilities, especially after the tragic Pahalgam attack.
US – China: Progress on global trade talks
Markets also cheered developments on the global stage. A breakthrough in trade discussions between the US and China, along with hints of an agreement between US and UK, gave investors across the globe something to smile about.
These also show signs of de-escalation in tariffs and friction are particularly good news for export-driven Indian companies.
MF flows in small and midcaps higher than large caps
Another development that’s really boosting sentiment for the small and midcaps is the April AMFI data. As per the April numbers, The small and midcap funds have seen significantly higher inflows in comparison to large caps. This buying by Mutual Funds have also helped the rally in this space.
Foreign funds are flowing in
Foreign Institutional Investors (FIIs) have pumped in nearly Rs 12,000 crore in May and more than Rs 50,000 crore since mid-April. This has given a fillip to sentiment and made investors adventurous enough to again bet on the small and midcaps that saw maximum correction in March.