Buoyed by recent buying by FIIs and DIIs, Nifty Small-cap index gave a breakout at 9,500 level and the index is expected to continue in an uptrend. According to stock market experts, if it stays above the level of 9,650, the index can go up to the level of 10,500. Market experts believe that in the medium to long term in the small-cap segment, banking, IT and consumer good sectors are going to lead the rally. Share Market Experts said any fall in quality banking, pharma, auto and consumer goods stocks in the small-cap segment should be viewed as a buying opportunity by situational investors, who have medium to long-term outlook.
Speaking on the breakout in Nifty Small-Cap Index, Sumeet Bagadiya, Executive Director, Choice Broking said, “Nifty Small-Cap Index is on an uptrend and the index has given a breakout at around 9,500. The index is facing resistance at 9,650 levels. And once it remains above this level, in the medium term it may go towards 10,000 to 10,500 level.”
Expecting the Nifty small-cap index to outperform the Nifty 50 index in the medium to long term, Nishit Master, portfolio manager, Axis Securities, said, “Last month, the small-cap index has garnered more interest by domestic funds and retail investors. This month’s outperformance is behind the Nifty 50’s underperformance last year and thus looks like a catch-up trade. We believe this month’s outperformance of the small-cap index for Nifty 50 The outperformance may continue for some time. The gap between their performances should be less.”
Stocks that Boost Nifty Small-Cap Index
On sectors that fueled the rally in Nifty small-cap index, Axis Securities expert said, “The sectors which we think should outperform the small-cap index are capital goods, real estate, auto, banking and financials. , especially small-caps. Bank.”
Batting strongly in favor of banking, pharma and consumer goods stocks in the small-cap segment, Chirag Setalvad, head-equities, HDFC Asset Management, said, “One can look at banking, pharma and consumer goods stocks as these segments have a strong bias. Others are expected to outperform the sector over the medium to long term. This segment accounts for about 45 per cent of the net market strength and if an investor has a diversified asset allocation in these small-cap segments, over a period of time. Can expect to beat major benchmark returns.”
In YTD timing, major benchmark indices have given zero returns to their investors as the BSE Sensex has fallen over 2 per cent in 2022 while the NSE Nifty has lost around 1.75 per cent in the period.
Disclaimer: The views and recommendations given above are those of individual analysts or broking companies and not of Mint.
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