Profit booking takes the shine out of small-cap and mid-cap stocks


In a reversal of upward trajectory after several months, the BSE small- and mid-cap indices were hit hard on Tuesday as they fell as much as 2% on profits recorded by investors.

The benchmark BSE 30-stock index outperformed the broader market, gaining 151.81 points or 0.28% on Tuesday.



“Mid and small cap stocks continued to bleed as profit taking followed a strong rally over the past 2-3 months,” said Siddhartha Khemka, head of retail research at Motilal Oswal Financial Services. ltd.

In the small cap index, Jindal Poly Films plunged 11.62%, Ambika Cotton Mills fell 10.15%, Hindustan Oil Exploration Company fell 9.99% and Mcleod Russel India Ltd fell 9. .88%.

The small cap index closed at 26,065.95 points, down 545.72 points or 2.05%.

“What started as a selloff in metal stocks today triggered a selloff in the small cap index after a months-long rally,” said S Ranganathan, head of research at LKP Securities.

A strong rebound in mid- and small-cap stocks in recent months has prompted investors to take profits, said Binod Modi, head of strategy at Reliance Securities.

In Tuesday’s trade, the mid-cap index closed 194.54 points or 0.85% lower at 22,762.05 points.

Among mid-cap stocks, KIOCL fell 5.47%, National Aluminum Company fell 5.32%, Steel Authority of India Ltd fell 5.18% and JSW Energy lost 5%.

The small cap index had hit an all-time high of 27,323.18 points on August 4 this year. The midcap index had also hit its all-time high of 23,478.8 points on the same day.

So far this year, the small cap index has gained 7,967.84 points or 44% while the mid cap index has gained 4,820.62 points or 26.86%.

The BSE benchmark has jumped 6,803.33 points or 14.24% so far this year.

(Only the title and image of this report may have been edited by Business Standard staff; the rest of the content is auto-generated from a syndicated feed.)

Dear reader,

Business Standard has always endeavored to provide up-to-date information and commentary on developments that matter to you and that have wider political and economic implications for the country and the world. Your constant encouragement and feedback on how to improve our offering has only strengthened our resolve and commitment to these ideals. Even in these challenging times stemming from Covid-19, we remain committed to keeping you informed and updated with credible news, authoritative opinions and incisive commentary on relevant topical issues.
However, we have a request.

As we battle the economic impact of the pandemic, we need your support even more so that we can continue to bring you more great content. Our subscription model has received an encouraging response from many of you who have subscribed to our online content. More subscription to our online content can only help us achieve the goals of bringing you even better and more relevant content. We believe in free, fair and credible journalism. Your support through more subscriptions can help us practice the journalism we are committed to.

Support quality journalism and subscribe to Business Standard.

digital editor