The surge witnessed in small-cap stocks on Monday has put a question mark over the surveillance measures imposed by market regulator Securities and Exchange Board of India (Sebi) and the bourses last week.Monday once again proved that liquidity has a far greater say in the market dynamics, as small-cap and mid-cap counters witnessed huge buying activity with many hitting the upper circuits and closing in the black. The BSE Smallcap index was the best performer of the day registering a gain of nearly 5 per cent or 265 points. This index had plummeted by 11.3 per cent last Wednesday and Thursday in a selling avalanche.The index opened the day at 5,610.78 and traded in positive territory for the entire trading session, before closing at 5,870.69, a tad lower than the day’s high of 5,876.81. “These small-cap stocks had crashed last week following reports of Sebi investigation. The exchanges need to tighten surveillance further. otherwise small caps will be manipulated by operators again,” said a fund manager.The index comprises of 495 stocks and out of those 466 stocks closed in the positive territory. Interestingly, all the broader indices of the BSE namely, BSE-100, BSE-200 and BSE-500, boasted of strong undertone with at least 95 per cent of the stocks in each of these indices closing in positive territory.
