Nifty Midcap extends rally for a fifth session to gain 8% this week, strength likely to continue

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Shares of midcap companies extended their rally on March 21 to push the Nifty Midcap index up by over a percent around 51,751, extending gains for a fifth session and rising nearly 8 percent this week.

Strong investor interest has meant the midcap index has outperformed the benchmark Nifty 50 index, which is up nearly 4 percent for the week at above 23,300.

Angel One's Sameet Chavan is hopeful of the outperformance to continue. "Traders are advised to maintain a positive bias toward the midcap space for continued strength,”  he said. Siddhartha Khemka from Motilal Oswal Financial Services said, "…we expect the market recovery to continue in the near term, driven by continued buying interest and positive global cues."

The strength in equities has also coincided with a rise in Rupee, which has extended its rise to an eighth session, exceeding its longest gaining streak in 14 months.

Mankind Pharma shares were the top gainer on the index, jumping over 5 percent to trade at Rs 2,365 apiece. This comes as the stock sees heavy trading volumes, higher than its 10-day average. The pharma stock was followed by Tata Tech, which also surged over 5 percent to trade at Rs 701 per share. The rise in Tata Tech's stock price comes amid reports that it has emerged as one of the key suppliers to Elon Musk's Tesla, as it explores India expansion.

IT major Mphasis rallied nearly 5 percent to trade at Rs 2,416 per share. This comes despite a muted trend in the Nifty IT index, after global information technology player Accenture's second quarter revenue guidance fell short of investor expectations. The Nifty Mid-small IT & Telecom index was up nearly 2 percent to stand at nearly 9,116.

Other notable stocks which recorded strong gains included JSW Infra (nearly 5 percent higher), Sundaram Finance (nearly 4 percent higher), Aditya Birla Capital (nearly 4 percent higher), Poonawalla Fincorp (nearly 4 percent higher), Nykaa (nearly 4 percent higher), IREDA (nearly 3 percent higher), BSE (nearly 3 percent higher), Vodafone Idea (nearly 3 percent higher), Coforge (nearly 3 percent higher), Godrej Properties (nearly 3 percent higher), Paytm (nearly 3 percent higher) and more.

The Nifty Smallcap index also surged significantly, rising over 1 percent to hover around 16,076. Manappuram Finance was the top gainer on the index, rising over 8 percent to trade at Rs 235 per share.

Earlier on March 11, Morgan Stanley's Ridham Desai had predicted that the small- and mid-cap stocks could perform well in the coming months. "While they might dip slightly further, they are close to a turning point," he told CNBC-TV18, while adding that India was likely to outperform the global markets.

Disclaimer: The views and investment tips expressed by investment experts on Moneycontrol.com are their own and not those of the website or its management. Moneycontrol.com advises users to check with certified experts before making any investment decisions.