Stock market today: BSE Midcap, Smallcap jump over 1% each; what should you do?
BSE Midcap and Smallcap indices saw healthy gains, rising over a per cent each, in the morning session of trade on Thursday, March 14. The BSE Midcap index was up 1.02 per cent while the BSE Smallcap index was up 1.6 per cent around 10:25 am. The benchmark Sensex was 0.10 per cent up at that time.
The steep fall experienced by mid and smallcap stocks in the previous session stemmed from growing concerns surrounding their inflated valuations. Experts had long cautioned about the presence of froth and bubbles within the smallcap sector, which ultimately prompted investors to book profits. Also Read: Delayed rate cuts negative for Indian markets; investment opportunities galore in several sectors: Hemant Sood of Findoc According to Kotak Institutional Equities, most mid and smallcap stocks are still trading at lofty valuations despite the sharp correction in recent weeks.
"We are not sure if the correction marks a reversal of the market to fundamentals and numbers from sentiment and narratives. If it is the former, many low-quality stocks may still have a long way to go, in our view," said the brokerage firm. Also Read: US inflation prints dent rate cut hopes; what will move the market now? Here's what 5 experts say The brokerage firm underscored that the high returns over the past three years and the expectations of similar returns may have reinforced the direct and indirect participation of retail investors in the mid and smallcap segments.
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