BSE Indian markets which started on a good note witnessed some profit-taking towards the end of the week but still benchmark indices managed to close with gains of over 1 per cent for the week ended June 26.
The S&P BSE Sensex rose up by1.2 per cent while the Nifty50 increased by 1.3 per cent for the week ended on June 26 against 3.5 per cent rally seen in the S&P BSE Mid-cap index, and the S&P BSE Small-cap index ended with gains of 2.8 per cent during the said period.
Up to 55 stocks in the S&P BSE 500 index rallied between 10-30 per cent during a week that includes stocks like ABB India, Adani Gas, BHEL, Bandhan Bank, Future Consumer, Glenmark Pharma, Hindustan Zinc, Indian Bank, IDBI Bank, Indian Overseas Bank, SPARC, and Union Bank of India, etc.
As per the experts, small-caps and mid-caps are playing catch-up, but investors should stay focused by ignoring the noise, and stick with quality. Even though buying is seen in many small and mid-caps, investors should not allocate more than 20 per cent of their portfolio.
Umesh Mehta the Head of Research at Samco Securities said “sheer underperformance and the oversold state of small and mid-cap stocks have resulted in outperformance when the market, in general, bounced back from lower levels. BSE Cash market stocks in mid and small-cap space have always outperformed the indices after a major correction in their prices. So this time is no different.”
In 2018 the top small and mid-caps which were followed by two to three years of major price cuts are now producing better results. However, long term investors should not get carried away by such good performances and can have exposure to the extent of 20 percent in such small and mid-cap stocks with balance 80 percent in frontline large caps, he added.
Where is the market leaded?
It was a roller coaster ride for investors in the week gone by, BSE there were several factors which contributed ups and downs in the market including a rise in COVID-19 cases, and geopolitical tension between India-China.
However, investors should gear up for more volatility as markets head into the month of July. As the rollover data suggests that long positions got rolled over that would keep the markets afloat.