The shares of smallcap and midcap companies recovered sharply on June 23, pushing the broader market indices into the green while benchmarks hovered in the red.
The Nifty Smallcap 100 index recovered over 1.2 percent from its intraday low level to stand at around 18,281 in the morning. The Nifty Midcap 100 index meanwhile rose nearly 1 percent from its day's low to hover around 58,112. The indices have now extended gains for the second consecutive session, after a multi-session losing streak.
Top midcap gainers:
Glenmark Pharma shares were the top gainer on the midcap index, jumping over 3 percent to trade at Rs 1,693 apiece. Dixon Tech and Polycab shares followed, rising over 3 percent each. Defence majors Mazagon Dock Shipbuilders, Bharat Dynamics (BDL) and Cochin Shipyard shares gained over 2 percent, while AB Capital and NHPC shares gained around 2 percent.
Other notable midcap stocks which recorded strong gains include Bombay Stock Exchange (BSE), Nykaa, HUDCO, Hindustan Zinc, Colgate Palmolive, MRF, National Aluminium, Paytm and others.
Top smallcap gainers:
On the smallcap index, Kfin Tech shares were the top gainer, jumping over 5 percent to trade at Rs 1,336 apiece. Zen Tech shares meanwhile rallied 5 percent to hit the upper circuit at Rs 1,995 apiece. Other notable smallcap stocks which recorded strong gains include ITI, GRSE, Poonawalla Fincorp, NBCC, Amber Enterprises, Angel One, CDSL, Nuvama, MCX, BEML, Laurus Labs and more.
Here's what analysts say
Notably, analysts have 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.
Also read: Our LIVE blog on stock market updates
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