Small and midcap stocks rebounded Tuesday with several technical indicators suggesting likely troughs for both the beaten-down market segments, which may be poised for a likely pullback rally ahead of the general elections.
The BSE Smallcap index and Midcap index rose 3.11 per cent and 2.01 per cent, respectively, as against the 1 per cent rise in the Sensex, with buying emerging in the deeply-oversold midcap and smallcap stocks.
“Buying seems to be emerging in the beaten-down midcap and smallcap stocks that are currently available at reasonable valuations,” said Gopal Agarwal, senior fund manager, DSP Mutual Fund. “This indicates the possibility of a bounce-back rally in the smallcap and midcap space for the short term.”
With most of the global powers supporting India in the recent military standoff, New Delhi has gained the goodwill and confidence of global investors. As risk aversion fades, investors are back to buying mid and small cap stocks, said fund managers.
Between January 2018 and February 2019, midcap and smallcap indices have seen deeper corrections compared with the largecap index despite registering higher profit growth. The BSE Smallcap index, which fell 32 per cent between January 15, 2018 and February 18, 2019, has recovered 10 per cent since then. Similarly, the BSE Midcap index gained 7.32 per cent since February 2 after sliding 25 per cent between January 9, 2018, and February 18, 2019.
“We believe the tide is about to turn and ..
While Nifty has returned 4 per cent over the past one year despite clocking 7 per cent overall PAT growth, mid-cap and small-cap indices have corrected 15 per cent and 24 per cent despite clocking 50 per cent and 27 per cent PAT growth, respectively.
The correction this time in Smallcap index is similar to 2008-09. BSE Smallcap index declined 72 per cent in 13 months between January 2008 and February 2009 and recovered 131 per cent in the next six months.
Technical analysts, to
The BSE Smallcap index and Midcap index rose 3.11 per cent and 2.01 per cent, respectively, as against the 1 per cent rise in the Sensex, with buying emerging in the deeply-oversold midcap and smallcap stocks.
“Buying seems to be emerging in the beaten-down midcap and smallcap stocks that are currently available at reasonable valuations,” said Gopal Agarwal, senior fund manager, DSP Mutual Fund. “This indicates the possibility of a bounce-back rally in the smallcap and midcap space for the short term.”
With most of the global powers supporting India in the recent military standoff, New Delhi has gained the goodwill and confidence of global investors. As risk aversion fades, investors are back to buying mid and small cap stocks, said fund managers.
Between January 2018 and February 2019, midcap and smallcap indices have seen deeper corrections compared with the largecap index despite registering higher profit growth. The BSE Smallcap index, which fell 32 per cent between January 15, 2018 and February 18, 2019, has recovered 10 per cent since then. Similarly, the BSE Midcap index gained 7.32 per cent since February 2 after sliding 25 per cent between January 9, 2018, and February 18, 2019.
“We believe the tide is about to turn and ..
While Nifty has returned 4 per cent over the past one year despite clocking 7 per cent overall PAT growth, mid-cap and small-cap indices have corrected 15 per cent and 24 per cent despite clocking 50 per cent and 27 per cent PAT growth, respectively.
The correction this time in Smallcap index is similar to 2008-09. BSE Smallcap index declined 72 per cent in 13 months between January 2008 and February 2009 and recovered 131 per cent in the next six months.
Technical analysts, to
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