Tag: small caps

The global stock market rally continues unabated with the Dow, Nasdaq, S&P 500, and the pan European Stoxx 600 again setting new record highs. It looks like markets are currently ignoring valuation concerns. The fact that 583 stocks, mostly mid and small-caps were locked in the upper circuit yesterday is an indication of the frenzied retail activity in markets. These are warning signals to investors. However, the news from the inflation front is positive with June CPI coming at 6.26% against an expectation of 6.5%. This gives room for the RBI to continue on the accommodative mode further strengthening the bulls. While remaining invested in high-quality stocks investors should be careful regarding investments in small-caps, according to market analysts.

Two hundred and sixty-three stocks or more than half of stocks that comprise the BSE 500 are trading at least 10 percent below their all-time high levels, despite the index hitting a record high 20,515 points on the BSE in intra-day trade today(19th May 2021), surpassing its previous high of 20,390 touched on March 12, 2021. The index, which accounts for 93 percent market capitalisation of BSE listed companies, has gained 8 percent from its recent low of 18,983 touched on April 19. In comparison, the benchmark S&P BSE Sensex gained 6 percent during the same period but is still nearly 4.5 percent away from its all-time high level of 52,517 hits on February 16. Analysts ascribe the underperformance of bulk of BSE 500 stocks to a classic case of polarisation, where investors are lapping up stocks of sectors that are likely to do well going ahead. Read more

Mid-and-small caps seem to be getting their mojo back with both these indices outperforming their large-cap peer after a subdued performance for the last two years. From their March 2020 low, the S&P BSE Mid-cap and S&P BSE Small-cap indices have surged 57 percent and 49 percent, respectively as compared to 47 percent rise in the S&P BSE Sensex. Even on a year-to-date basis, the returns have been better. The small-cap index on the BSE has moved up nearly a percent. The mid-cap index, however, lost 3.7 percent YTD, but is still better than the 7.5 percent fall in the S&P BSE Sensex during this period, ACE Equity data show. Read more

Small-caps have outrun the mid-and-large caps in the last one month that the country has been under lockdown, triggered by the COVID-19 pandemic. The outperformance of the small-cap segment versus these two market segments also holds good from the lows the markets hit on March 24. The S&P BSE Small-cap index has recovered 26 percent as compared to a 23 percent rise in the S&P BSE Sensex and broader market index S&P BSE Midcap index from their respective 52-week low touched on March 24. Read more