Buoyed by robust stock market sentiment, the small-cap and mid-cap indices of the BSE have rallied by up to 56 per cent, outperforming the larger index — Sensex — this fiscal.
The small-cap index of the BSE has given a return of 55.86 per cent, followed by mid-cap index with 40.29 per cent gain.
On the other hand, gains in the blue-chip index Sensex have been at 24.11 per cent from April 1 till date, an analysis of the three indices showed.
The Sensex had touched its all-time high of 27,969.82 yesterday.
The mid-cap index touched its one-year peak of 10,068.63 on September 16 and the small-cap index hit its 52-week high of 11,352.01 on the same day.
Experts said when markets perform well, smaller stocks make big gains than the front-lines. But during times of uncertainty, greater losses are seen in mid and small-cap stocks.
Investor sentiment
Analysts said the bullish investor sentiment following a new government at the Centre and robust foreign fund inflows have been fuelling the rally in the domestic equity market.
Since the beginning of this year, overseas investors have infused Rs 82,266 crore ($13.7 billion) into the equity market, while they invested Rs 1.36 lakh crore into the debt market ($22.5 billion) taking the total to Rs 2.18 lakh crore ($36 billion).
Retail investors are major participants in mid-cap and small-cap stocks and their activity in this segment has been upbeat over the past few months.
Market players say smaller stocks are generally bought by local investors, while overseas investors focus on blue-chip shares.
Mid-cap index tracks companies with a market value that is on an average one-fifth of blue-chips or large firms. Small-cap firms are almost a tenth of that.