BSE mid and small-cap score on HNI action

The indices have gained 20.55% and 18.55%,respectively,between August 28 and Nov 3.

While the BSE mid and small-cap indices are still far from their all-time highs,they have outperformed the BSE barometer Sensex in the recent rally.

The BSE mid and small-cap indices have gained 20.55% and 18.55%,respectively,between August 28 and November 3. In the same period,Sensex moved from 17,996 to its life-time high of 21,239,gaining 18.21%.

According to experts,mid-caps are seeing bottom-fishing from high net worth individuals (HNIs). Market participants are seeing the cycle turning. Within mid-caps,PSU bank stocks are favourites, said AK Prabhakar,an analyst.

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Shares of Allahabad Bank gained more than 19% in the last three months. Among other PSU bank scrips,Andhra Bank (8.77%),Dena Bank (28.62%),UCO Bank (33.6%),Central Bank of India (3.54%),have posted smart gains during the same period. Mid and small-caps have outperformed large caps recently as there is valuation gap in various mid-caps. Our picks are Supreme Industries,Berger Paints,Eclerx Services,Engineers India,Bajaj Finance, said Rakesh Tarway,AVP (research),Motilal Oswal Securities. In year-to-date period,BSE mid- and small-cap indices have declined 12.68% and 18.52%.

Among other mid-cap stocks,GMR Infra (81.96%),Just Dial (77.83%),Tata Communications Ltd (74.87%) and Jaiprakash Power (73.06%),Ajanta Pharma (59.28%),Persistent Systems (55.8%) and TVS Motor Company Ltd (52.79%) have been top-performers in the last three months.

Market observers feel any further rally in mid-cap stocks would depend upon macro-economic factors. Sectors which see economic traction are likely to outperform. QE tapering remains a major risk to the rally, said Vinay Khattar,head (research),retail capital markets,Edelweiss.