Beyond index highs and smallcap carnage, India's top performing stocks have risen 30-100% this year

If we look at the data from January when the index hit the first record high, the share of stocks gaining positive momentum is still lower than the losers which highlight negative breadth for the index.

As many as 101 stocks in the S&P BSE 500 index gave positive return while the rest slipped up to 90 percent in the same period which includes names like Vakrangee, Kwality, PC Jeweller, HCC, Reliance Naval, 8K Miles, Jet Airways, PTC India, Punjab National Bank, and Suzlon Energy.

Mid & smallcaps have come under pressure due to regulatory headwinds as well as high valuations in 2018. Analysts are advising investors to move away from small & midcap space and buy into largecaps. However, some mid & smallcaps might look attractive after a recent slide.

Over 80 percent of the stocks in the S&P BSE Smallcap index gave negative returns from January 29 to July 24 which include names like Gitanjali Gems, KSK Energy, Kwality, JBF Industries, Omkar Speciality, Diamond Power, SRS Real, Sunil Hitech etc. among others.

“We have been suggesting our retail investors to shift their equity exposure from mid & small caps to large caps which we are still continuing. But some of the prices in midcaps have become attractive which can be considered for the long-term,” Vinod Nair, Head of research at Geojit Financial Services told Moneycontrol.

“However, we are still within the long-term bull rally which is under a phase of consolidation. This phase of consolidation can continue till the domestic earnings growth return & politics fear settle, global bond yield normalise & risk-off trend reverse,” he said.