Small stocks give better returns this year

Tags: Stock Market
Helped by smart participation from retail investors and bullish stock market sentiment, the mid-cap and small-cap indices of the BSE have given handsome returns to investors, outperforming their large-cap peers so far this year.

While the small-cap index of the BSE has given a return of 53.21 per cent, the mid-cap index followed with 36.87 per cent. In comparison, the gain in the blue-chip 30-scrip index, Sensex, has been about 23.41 per cent.

Market experts said that during the times of uncertainty one witnesses greater losses in mid and small-cap counters. But when markets rally, these stocks move ahead of the front line stocks.

The Sensex hit all-time level of 26,300.17 on July 25.

The mid-cap index touched its one-year peak of 9,596.88 on July 7, while the small-cap index recorded its 52-week high of 10,624.24 on July 8.

Analysts attributed surge in different market segments to robust investor sentiment following the formation of a new government and foreign investors who have been betting big on the Indian equities.

In 2013, even as the stock markets recorded handsome gains, driven by large blue-chips, small and mid-cap stocks had declined as much as 12 per cent.

Retail investors are major participants in mid-cap and small-cap stocks and activity in this segment has increased over the past few months.

Marketmen say smaller stocks are generally bought by local investors, with overseas investors focusing on blue-chip shares.

The mid-cap index tracks companies with a market value that is on average one-fifth of blue-chips or large firms. Small-cap firms are almost a tenth of that.

EDITORIAL OF THE DAY

  • Finalising the formula for fixing the fair market value of shares calls for a detailed debate

    Whenever there is a change of regime at the Centre, the new government has its tasks cut out for execution.

FC NEWSLETTER

Stay informed on our latest news!

TODAY'S COLUMNS

Roopen Roy

High CEO pay and the gaps it leaves

Unlike the UK, Norway took a remarkable decision with its ...

Zehra Naqvi

Watch your words, for they can kill

You must’ve heard the ph­rase ‘if looks could kill’. Ever ...

Dharmendra Khandal

Biodiversity day has come and gone. Yet again

Every year on May 22, world celebrates international biodiversity day. ...

INTERVIEWS

William D. Green

Chairman & CEO, Accenture