Mid-caps, small-capds outperforming Sensex in FY11 so far

The Bombay Stock Exchange's (BSE) mid-cap and small-cap companies have outperformed blue-chip firms in the current fiscal so far, growing by as much as 10 per cent compared to the broader market Sensex.

As per a study, the small-cap index soared by over 10 per cent during the March 31-July 30 period to settle at 9,348.97 on July 30. Similarly, the mid-cap index has grown by nearly 9 per cent during the period to close at 7,407.91 on July 30.

Meanwhile, the broader market Sensex could only manage to rise by 3 per cent to end at 18,081.21 on July 30.

"The broader market index is doing nothing much as compared to its peers, the mid-cap and small-cap indices. The pick up in the returns of these indices gives a clear indication that investors are shifting from frontline stocks to smaller firms who provide stocks at a lower cost," Ashika Stock Brokers Research Head Paras Bothra said.
    
The mid-cap and small-cap indices track the performance of companies with market capitalisations that are a fifth or a tenth of that of blue-chip firms.
    
During the review period, the mid-cap index witnessed its highest closing level of 7,456.62 on July 22, 2010, while the small-cap index posted its highest close of 9,491.04 on the same day.
    
"Investors are now more confident on spending in low cost stocks as they are giving good returns, that is why buyers are now flocking to get these stocks, which are available at a reasonable price in the market," Bonanza Portfolio AVP Avinash Gupta said.
    
The BSE's 30-share Sensex index saw its highest close at a fresh 30-month high of 18,130.98 on July 23.