Mid, small-cap rally to continue even as indices hit new high

The surge, analysts say, is likely to continue on strong liquidity flow into the equity markets

Mid- and small-cap stocks continue to find favour with investors, with the S&P BSE MidCap and S&P BSE SmallCap indices hitting a fresh high on Thursday. So far in calendar year 2017 (CY17), both these indices have rallied around 31.5 per cent and 36 per cent, respectively, compared with a 19 per cent gain in the frontline S&P BSE Sensex.

Since their respective lows in August, while the S&P BSE SmallCap Index has recovered nine per cent, the mid-cap index gained 7.5 per cent till Thursday. When compared to the broader market, the Sensex gained 1.4 per cent.

The surge, say analysts,