Several smallcap and midcap stocks recorded strong gains on February 20, pushing the broader market indices into the green for the second straight day. This comes despite benchmark indices Sensex and Nifty trading in the red.
BSE Smallcap index gained over 1 percent to stand at 45,960. It had closed in the green at 45,455.83 on February 19.
Windlas Biotech was the top gainer of the BSE Smallcap index, surging nearly 15 percent to trade at Rs 774 per share. The stock has pared some gains after briefly getting locked in the 20 percent upper circuit at Rs 811 per share. The rally in the stock price comes a day after Samvitti Capital - Active Alpha Multicap reportedly sold 0.11 million shares in the company.
The shares of MTAR Tech, BL Kashyap, Archean Chemical Industries, GE Power India and Thomas Cook also recorded strong gains, rising 10 percent to 12 percent.
"Both Smallcap and Microcap indices have formed bullish engulfing candlestick patterns on the daily chart, indicating a probable trend reversal," said Vinay Rajani, Senior Technical & Derivative Analyst at HDFC Securities.
The Nifty Smallcap 100 index declined over 20% from its 52-week highs amid market correction due to weak quarterly earnings and persistent FII selling.
The BSE Midcap index meanwhile rose nearly 1% to stand at 40,698.
Linde India shares jumped over 8 percent to trade at Rs 6,346 apiece, standing as the top gainer on the index. This comes as the stock saw heavy trading volumes. Over 5 lakh shares have so far exchanged hands on stock exchanges. This is over 11 times higher than its 10-day average trading volume.
Godrej Industries shares followed, recording a significant rise of 6 percent to trade at Rs 911 apiece. Some other notable gainers on the index included Bank of India (up 3.62 percent), Cummins (up 3.42 percent), IGL (up 2.97 percent) and others.
Notably, the Reserve Bank of India (RBI) in its bulletin released on February 19 indicated a pick-up in the momentum of economic activity during the second half of the current financial year.
"A positive news is the RBI indicating growth recovery in H2 FY25. This bodes well for growth and earnings recovery in FY26. Market will start responding positively to the high frequency data indicating growth recovery. Beaten down midcaps like defence stocks are witnessing some buying," said V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services.
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