Small & Mid-Cap Powered Indian Markets to Closing Gains

MAHARASHTRA, India – Small and Midcap shares are joining the party on D-Street as it mostly powered the Indian stock market to end the trading week on a more positive note.

The trading week has been optimistic for the Indian markets with both the Sensex and Nifty reaching for a historical week with fresh record highs. The Indian markets have also closed the trading with more than 1% gains for each index. However, the big returns for the market are largely from both the small and mid-cap spaces.

As the trading week ended on Friday, November 29, the Sensex index rose by around 1.08% while the Nifty tracked around 1.19% increase, compared to the 0.78% increase in the S&P BSE small-cap index and the rally in mid-cap index with a 2.3% increase in the same period.

For the week ended November 29, the index that measures the share performance of 500 big companies that has been listed in the Indian stock exchanges, BSE 500 index, tracked around 1.38% gains, which outperformed both the Nifty and Sensex.

Among the shares listed under the BSE 500 index, 23 stocks which include those from small and mid-cap lists, has risen by around 100% to 40% in just the five trading sessions this week.

Indian shares that ended the trading week with dramatic gains, rising almost double digits include Torrent Pharma, TVS Motor, LIC Housing Finance, Bandhan Bank, Union Bank of India, L&T Finance Holding, Jindal Steel & Power, and Indiabulls Housing Finance.

Market experts, commenting on the closing gains for the Indian market, suggest that the small and mid-cap space has started to join the party on D-Street with the smart money starting to move in these spaces, especially on the one that has experienced the beat down during the previous weeks.

Small and mid-cap indices in the BSE has gone down around double digits from their previous record highs.

According to Dinesh Thakkar from CMD, Tradebulls Securities, many of the small and mid-cap stock that has been beaten down is currently at an attractive valuation, and investors are not chasing the markets anymore, preferring to invest in stocks that can give higher margin on security and safety instead.

In the BSE small-cap companies, around 40 stocks have risen to 10% to 40% this trading week, which includes Inox Wind, Indoco Remedies, DB Realty, Tilaknagar Industries, and Future Consumer as top gainers.

The following week will even be more eventful, analysts say, as the GDP numbers will start coming out and the monetary policy of the RBI is set to be released on December 5.