Smallcap rally steady despite high valuations as 52 stocks gain in double digits
As elevated valuations cap the upside in the broader market, smallcap rally was subdued but steady with 52 stocks gaining in double digits during the week. Mid and smallcaps had witnessed strong rallies over the past few months thus making valuations a little stretched.
Automotive Stampings was the top gainer in the smallcap pack with a 44% return, followed by Visaka Industries (34%), Jayaswal Neco Industries (27%), and Schneider Electric (27%).
About 11 stocks, including Triveni Turbine,Sanghvi Movers, Indiabulls Real Estate, Parag Milk Foods, Everest Kanto, SH Kellar have offered returns between 20-25% during the week.
In the midcap segment, 13 stocks including Vodafone Idea, YES Bank, Indian Overseas Bank have risen in double digits. While VI gained 10.5%, YES Bank and Indian Overseas Bank were up over 32% and 21%, respectively.
From the Sensex pack, SBI topped the charts with 11.3% return, followed by Sun Pharma at 8.3% and TCS at 4.2%.
For Nifty, the favourable global scenario initially boosted the benchmark to inch higher but lacked confidence near the psychological mark of 22,000 and enticed profit booking. Buying was seen in largecaps where there is still some comfort, compared to the broader market.
What should investors do?
Going forward, analysts said caution prevails in the market ahead of the release of US, UK, and Indian inflation data next week, while the US 10-year yield is inching higher.
Post the hawkish commentary from the US Fed and RBI and their focus on bringing inflation under
