The shares of midcap and smallcap companies strongly surged on May 12, pushing the Nifty Midcap and Nifty Smallcap indices higher by 4 percent to mirror the massive rally seen in benchmark indices Sensex and Nifty. This comes as the easing geopolitical tensions between India and Pakistan, and the US-China trade deal were positively welcomed by the investors.
The Nifty Midcap 100 index was hovering at 55,416 in the late afternoon trade, up 4.1%. Rail Vikas Nigam (RVNL) shares were the top gainer on the index, rising nearly 10 percent to trade at Rs 354 apiece. Steel Authority of India (SAIL) and Persistent Systems shares followed, rising over 8 percent each. Coforge, Suzlon Energy and BHEL shares rose over 7.5 percent, while Godrej Properties, HUDCO and NHPC shares were up over 7 percent.
Indian Renewable Energy Development Agency (IREDA), Hindustan Zinc, HDFC AMC and Motilal Oswal Financial Services shares meanwhile rose over 6 percent each.
Other notable midcap stocks that recorded strong gains included Mphasis, Ola Electric, L&T Finance, Concor, BSE, Dixon Tech, Tata Tech, Policybazaar, Vodafone Idea, Bandhan Bank, IDFC First Bank, Mankind Pharma, Paytm, Indian Bank, Union Bank, Phoenix, Kalyan Jewellers, Oil India, Nykaa, Bharat Forge, IGL, Indus Towers, Voltas, Yes Bank and more.
The Nifty Smallcap 100 index stood at 16,770 in the late afternoon trade, up 4.3%. JBM Auto shares were the top gainer on the index, rising nearly 12 percent to trade at Rs 693 apiece. HFCL shares followed, trading nearly 10 percent higher at Rs 81.47 apiece.
Other notable smallcap stocks which recorded significant gains include Hindustan Copper, First Cry, Inox Wind, Titagarh Rail Systems, MCX, IDBI Bank, Angel One, Amber Enterprises, NBCC, CESC, Anant Raj, Kaynes Tech, CAMS, BEML, CDSL, Poonawalla Fincorp, PVR Inox, Delhivery, MGL, Nuvama, IEX and more.
India and Pakistan on May 10 announced an understanding to stop all firings and military actions on land, air and sea. This came after increased hostilities after Indian military forces destroyed nine terror sites in Pakistan and Pakistan-Occupied-Kashmir under the code-name 'Operation Sindoor' on early May 7, in retaliation to the Pahalgam terror attack.
"The de-escalation between India and Pakistan removes a key overhang on investor sentiment and is likely to be seen as a major positive development by financial markets. Historically, markets have responded positively to such geopolitical cooling," said Prashanth Tapse, Senior VP (Research), Mehta Equities.
Additionally, officials from US and China held trade talks in Switzerland during the weekend. Following the meeting, the two countries announced that they have agreed to a 90-day pause on reciprocal tariffs. US said it will slash tariffs on Chinese goods from 145 percent to 30 percent for 90 days while China said it will reduce tariffs on US goods from 125 percent to 10 percent for 90 days from May 14 onwards.
The easing tensions between India and China, and the cooling trade war between US and China have boosted the markets, with Sensex jumping over 2,800 points to stand at 82,273. Nifty meanwhile soared 4 percent to hover around 24,885.
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