Mumbai: The Bombay Stock Exchange’s (BSE) mid-cap and small-cap companies have beaten the blue-chip firms in the current fiscal so far by growing as much as 6% compared to the broader market Sensex.
As per a study of indices on the BSE from 1 April –25 June, the mid-cap index has given a return of 4% to settle at 7,082.51 as on 25 June. Similarly, the small-cap index has faired better and finished up nearly 6% at 8,989.
“The investors are getting good returns from the small- cap and mid-cap stocks that is why they have shifted from the frontline Sensex stocks. This is a trend generally when the frontline stocks are in consolidation phase the investors flock towards stocks which are available at low cost,” Ashika Stock Brokers research head Paras Bothra said.
Meanwhile, the BSE bellwether Sensex rose just 0.26% to close at 17,730.24 points on 25 June.
The mid-cap and small-cap indices look after the performance of companies with market capitalizations that are a fifth or tenth of that of blue chip firms.
During the period reviewed, the mid-cap index saw its highest closing level at 7,184.78 points on 30 April, whereas the small-cap index reported the highest closing at 9,245.03 points on 26 April.
Similarly, the BSE 30-share index Sensex also settled at its high at 17,970.02 points on 7 April.
“The valuation gap between the mid-cap, small-cap firms and large-cap was significant. The improvement in the economic conditions and hence corporate performance, made the small and mid-cap asset class an attractive bet, thus aiding them to outperform the large caps,” Bothra added.
In terms of wealth, mid-cap index companies saw their combined valuation surging at about Rs50,028.25 crore, while the gains of small-cap firms have been at about Rs13,701.75 crore during the period.
While, Sensex companies have gained about Rs44,983.25 crore due to the surge in the overall market. The total market capitalization of the Sensex stands at nearly Rs26,69,520.75 crore till 25 June, 2010.