Larger Indices Do Better than Small Caps, with Almost 100 Small Caps Rising up to 41%

Larger Indices Do Better than Small Caps

Thanks to a number of factors including declining crude oil prices, buying by foreign institutions, easing inflation prints, moderation in US yields, and expectations of a longer break on rate hikes by major central banks, the Indian equity indices began Samvat 2080 on a positive note, extending a winning streak for the third week.

The truncated week that concluded on November 17 saw gains of 306.45 points, or 1.57 percent, for Nifty50 to 19,731.80, and 1.37 percent, or 890.05 points, for the BSE Sensex, which closed at 65,794.73.

The BSE SmallCap, MidCap, and LargeCap indices increased by 3.1 percent, 2.5 percent, and 1.6 percent, respectively, indicating that wider indices performed better than the major indices.

“Indian markets concluded the week on a positive note, supported by favorable macroeconomic statistics pointing to moderate inflation and global cues. Less than anticipated inflation data from the US, UK, and domestic market increased investor confidence and stoked expectations that the interest rate cycle would finish. Gains in small- and mid-cap stocks, in particular, were driven by this optimism, according to Vinod Nair, head of research at Geojit Financial Services.

“As more spending was anticipated, confidence in export-oriented industries like IT and pharmaceuticals rebounded, while the car and real estate sectors saw a boost over the festival season. However, the RBI‘s move to increase risk weights for unsecured loans at the end of the week had an effect on banks equities. Notwithstanding this, he continued, “the market is likely to sustain its positive momentum in the near term, helped by falling oil prices and moderating US yields.”

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