The shares of several smallcap and midcap companies recorded significant gains on June 20, pushing each of the broader market indices around a percent higher. The Nifty Midcap and Nifty Smallcap indices have now snapped their respective three-day losing streaks.
The Nifty Midcap index gained over 1 percent to hover around 57,747 in the morning, while the Nifty Smallcap index rose 0.98 percent to stand at 18,190.
Analysts noted that the earlier drop in the stock prices were driven by profit booking following a record run. "Broader market sentiment remained risk-averse [earlier], as mid- and small-cap segments witnessed pronounced profit-booking. [The drop reflected] a flight to safety as market participants rotated capital into large-cap, defensively positioned blue-chip counters," said Bajaj Broking.
"The recent correction in small- and mid-cap stocks is driven by profit booking and stretched valuations after a sharp rally, alongside concerns over rising crude prices due to geopolitical tensions. These factors have heightened inflation worries and dampened market sentiment. Investors should adopt a selective, long-term approach—focusing on quality stocks with strong fundamentals, reasonable valuations, and credible promoters," said Ajit Mishra, SVP of Research at Religare Broking Ltd.
However, with significant correction having taken place in the space during its three-day losing streak, the midcap and smallcap stocks may have again attracted investor interest. This was further buoyed by the overall bullish sentiment in the market.
The broader market indices are performing more or less at par with the benchmarks, after several sessions of underperforming them. Sensex jumped over 705 points (0.9 percent) to 82,073 and Nifty surged 219 points (0.9 percent) to 25,014 in the morning.
Waaree Energies shares were the top gainer on the midcap index, gaining nearly 6 percent to hover around Rs 2,823 apiece. The stock has now snapped a three-day losing streak. Earlier on June 19, the company's management told CNBC-TV18 that it is largely insulated from US President Donald Trump's bill which proposed to completely phase out tax credits for solar module producers.
The rise in the share price of Waaree Energies also comes on the back of strong inflow hopes, following the rejig in indices of London-based Financial Times Stock Exchange (FTSE).
The shares of the firm's clean energy rival Premier Energies followed, jumping over 5 percent to trade at Rs 1,020 apiece. Union Bank of India and NTPC Green Energy shares surged nearly 4 percent each, while Indian Renewable Energy Development Agency (IREDA) shares gained over 3 percent. Vodafone Idea, Bank of India, HUDCO, Bharti Hexacom, L&T Finance, NHPC, Suzlon Energy and Godrej Properties were some of the other top midcap gainers today.
On the smallcap index, IFCI shares were the top gainer, jumping nearly 5 percent to trade at Rs 60 apiece. Kfin Tech shares followed, rising over 4 percent. Titagarh Rail Systems, CAMS and RaiTel Corporation of India shares gained over 3 percent each, while BEML, IDBI Bank, CDSL, HFCL, Brigade Enterprises, Manappuram Finance, IRCON, Kaynes Tech, MCX, Welspun Corp and GRSE were among the other top smallcap gainers.
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