The mid-cap and small-cap
indices on the BSE have outperformed their bigger counterparts this year,
reversing the losing trend of 2013 mainly due to the participation of retail
investors amid an overall bullish sentiment. The BSE Small Cap index has
advanced 14.83 per cent to 7,523.18 as of April 11, while the BSE Mid Cap index
has gained 9.43 per cent to 7,338.46. The benchmark 30-share BSE Sensex has risen
6.88 per cent to 22,628.96, after touching a record close of 22,715.33 on April
10. In 2013, even as the stock markets recorded handsome gains, driven by large
blue-chips, small and mid-cap stocks declined as much as 12 per cent. Analysts
said retail investors are major participants in mid-cap and small-cap stocks
and activity in this segment has increased over the past few months. Marketmen
say smaller stocks are generally bought by local investors, with overseas
investors focusing on blue-chip shares. When the markets rally, smaller stocks
move ahead of front-line shares, an expert said. Sentiment in the stock market
has picked up on hopes that a BJP-led government will come to power after the
ongoing general elections. According to analysts, the Bharatiya Janata Party is
perceived as being more market-friendly. Besides, investors expect the
country's economy to improve on the back of easing inflation, they said. The
mid-cap index tracks companies with a market value that is on average one-fifth
of blue-chips or large firms. Small-cap firms are almost a tenth of that.
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