Small, midcap indices extend gains for a sixth session on continued buying

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26 Aug, 2025 12:21

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The shares of small and midcap companies saw continued buying on March 24, pushing broader market indices higher for a sixth consecutive session as bulls extended last week’s rally.

The Nifty Midcap 100 index rose over 1.4 percent, crossing the 52,000-mark for the first time in over one month. The Nifty Smallcap 100 index was up nearly 1.3 percent around 16,390, standing at a month high. The mid and smallcap indices are now higher by more than 10 percent and 13 percent from their respective March 3 lows.

Shares of IREDA were the top gainers on the midcap index, surging over 7 percent after a fall of over 55 percent from July peak. IREDA had recently increased its borrowing limit by Rs 5,000 crore for the ongoing fiscal. It then launched its first-ever perpetual bond to raise Rs 1,247 crore.

The shares of Bharat Dynamics (BDL) followed, jumping over 5 percent. The rise in defence stocks has pushed the Nifty India Defence index up nearly 3.3 percent in the trading session.

Other midcap stocks that recorded strong gains included Policybazaar-parent PB Fintech (up nearly 5 percent), Kalyan Jewellers (up nearly 5 percent), Cummins India (up over 4 percent), Mazagon Dock Shipbuilders (up nearly 4 percent), Poonawalla Fincorp (up over 3 percent), Federal Bank (up over 3 percent), RVNL (up over 3 percent), IGL (up over 3 percent) and more.

On the smallcap index, shares of RailTel Corporation of India were the top gainer, rising over 5 percent higher after a sharp 10 percent jump in early trade. The surge in the share price comes after the company secured a Rs 25.15 crore order from Hindustan Petroleum Corporation.

360 One WAM, Brigade Enterprises, Kaynes Tech and other small-cap stocks followed, jumping over 4 percent each.

Religare Broking's Ajit Mishra said, "Traders are advised to adopt a 'buy on dips' strategy, focusing on sectors that have demonstrated consistent strength. Banking, financials, metals, and energy stocks remain preferred picks, while selective opportunities can also be explored in PSU and auto stocks. Given the sharp rebound in broader markets, midcap and smallcap stocks may offer potential trading opportunities, though aggressive positioning should be avoided. Overall, market sentiment remains positive, but investors should remain cautious and closely monitor key technical levels and global cues for further direction."

Talking about the sharp rally seen in the market last week, Devarsh Vakil, Head of Prime Research at HDFC Securities, said, "The weekly performance was particularly noteworthy across all major indices. The Nifty surged 953.20 points (4.26%), while the Sensex climbed 3,076.60 points (4.17%). Even more impressive were the gains in the mid and small-cap segments, with the Midcap 100 index rising by a remarkable 7.74%—its strongest weekly performance since April 2020—and the Smallcap 100 index soaring 8.64%, marking its most substantial weekly gain since June 2020."

Market veteran Ramesh Damani has showed strong hopes for the market. "The bull market has resumed," he said while speaking to CNBC-TV18. "What we saw over last 5 months was just a correction in a bull market, not topping of the bull market. It was just a normal market correction based on valuations," he further said.

Notably, US President Donald Trump has said that from April 2, the United States will charge India "the same tariff they charge us". He further said that New Delhi may lower import duties "substantially" as the deadline nears. However, Bloomberg recently reported that Trump's tariffs may be narrower than expected. Some countries may be exempt from it, the report further said. This has further fuelled the rally in India's stock market.

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.