Smallcaps look set to erase losses sparked by Sebi's froth warning
Sebi) warnings of froth in the broader markets, as investors remained bullish on this segment last month.
A nine-day rally in the Nifty Smallcap 250 index has put it on track to reclaim the level last seen on February 27 when Sebi's warning caused the bulls to hit a bump.
The Nifty Smallcap 250 index has gained nearly 6% in a week though its 1-month change still reflects an over 1% value erosion. Smallcaps have been in the top form, outperforming their large and midcap peers over the past 12 months. The Nifty Smallcap 250 has jumped by over 70% during this period.
On Wednesday, around 10:50 am, the index was up by over 100 points or 0.70% at 15,000 level.
“The bounce back in small-cap shares was expected to be sharp,” a Bloomberg report said quoting Chokkalingam G, a strategist at Equinomics Research. Investors have been preferring smaller companies with better business fundamentals and “there is clearly a shift to quality,” he said.
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The rout followed a relentless advance in such shares, driven by robust earnings and a recurring gush of cash from individual investors. The rebound underscores the continued bullish outlook for smaller firms, which are expected to benefit more than their larger peers from the nation’s robust economic growth.
Sebi’s comments had triggered a sharp selloff in smaller companies. The S&P BSE Smallcap Index erased more than $80 billion in market value in less than two weeks through
