Silver linings: Midcaps that rallied upto 38% in market meltdown

Moneycontrol Bureau

Global markets are going through a rough patch with parallels being drawn with the global financial crisis of 2008. Given the government's stretched finances and the patchy economic recovery, expectations from the upcoming Budget are low. India has so far not been immune to the global downtrend, with the Sensex and Nifty hitting new 52-year lows almost every week in January. Since December last year, both benchmark indices have lost around 6.5 percent. Midcaps and smallcaps have borne the brunt of the selling pressure so far and experts are warning of more pain ahead.

The carnage notwithstanding, some market experts feel the steep decline in prices good be a good opportunity to add some quality names to one's portfolio. “I would like to stay with quality names within the midcap basket and believe that the growth story is actually unfolding for many of the companies given the kind of growth in the economy which is now have started to happen," says Deven Choksey of KRChoksey Investment Managers says.

Midcap stocks like Jet Airways, SREI Infra, Pipavav Defence, Indian Hotels, Berger Paints, SKS Microfinance, SpiceJet and Indraprastha Gas are up 9-38 percent in a falling market. Buoyed up by low crude price Jet Airways gained 38 percent and SpiceJet added 9 percent in the period under review. Oil prices have fallen more than 70 percent in the past 18 months. Over supply due to excessive oil pumped by global exporters per day is set to worsen with the return of Iranian barrels to the market following the lifting of nuclear-related Western sanctions. Crude oil is still below USD 30 a barrel.