Equity benchmarks crawled higher during the week-ended December 28, with the Nifty gaining 0.7 percent to finish at 6,313, and the Sensex closing at 21,193, up 0.5 percent.
Buyers scoured for bargains among secondline shares, pushing up the CNX Midcap and BSE Smallcap indices 2.5 and 3.5 percent, respectively.
Capital goods, realty, power and bank shares were the flavour of the week, while pharma, FMCG and IT had an indifferent run.
Also read: Week ahead: Big year ends with Wall St hopeful for 2014
Dealers said overall activity was low key because of the vacation season.
Mid- and small-cap stocks have been trading far below their 2008 highs -- the CNX Midcap index is trading close to 8,000, compared to a high of 9,637 logged in January 2008 even as the Nifty trades close to its record highs.
This is an indication that the broader markets could outperform going into 2014, believes broker Dipan Mehta. "The best returns [in 2014] will be in mid- and small-cap stocks," he said. "As you see uncertainty levels come down, these shares will rally as their as their earnings become more predictable and they attain higher price-to-earnings multiples."
This, he said, was typical of bull markets where "in the first phase, large-cap stocks do well and then mid- and small-caps start outperforming large-caps."
KR Bharat, MD, Advent Advisors, however, was more cautious in his outlook and said given the weak fundamentals of the Indian economy, most of the 2013 rally in equities was driven by liquidity. One could witness a correction lasting the first or even a few quarters of 2014 and then a bull market from thereon, he said.
"Over the next two-three months, the pace of the Federal Reserve tapering will hasten and so liquidity will not play a major role in 2014. If India is to see a bull market, it has to be on the basis of [strong] Indian fundamentals and we are a fair distance from that."
Stock recap
Among frontline shares, BHEL, Jindal Steel, DLF and Punjab National Bank were the key gainers, up 4-7 percent. Grasim, ONGC, Hindalco, ACC and ITC rose 2-3 percent.
Laggards included HDFC, Lupin, RIL, Maruti Suzuki and Hero Motocorp, down around 2 percent each.
In news-driven stocks, Rico Auto jumped 54 percent amid news the company’s renewed focus on exports was paying off. The company’s management, in an interview to CNBC-TV18, said it had got export orders worth Rs 200 crore this year, above its normal business.
Amtek India gained 20 percent after the firm acquired Germany’s Kuepper Group, in a deal pegged at Rs 1,680 crore.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
