Sep 20 2023, 10:28
Why the rise and fall of stocks:
the Nifty Smallcap 100 witnessed a single-day decline of 4.1% while the Nifty Midcap 100 dropped 3.07%, with 90% of their member stocks closing deep in the red.
Withdrawing its recommendations on mid- and small-cap stocks, Kotak Institutional Equities said in its report that “There is no meaningful change in the fundamentals of most companies; in fact, they have worsened in many cases.
Societe Generale executive Kavish Kataria, who was made the scapegoat amid rumours that he had to liquidate his portfolio worth INR3,000 crore, leading to the sharp fall in mid- and small-cap stocks, clarified in a LinkedIn post that he was still employed with the French financial services giant.
Sanjeev Prasad, managing director and co-head, Kotak Institutional Equities, is one of the best analysts in India.
Prasad categorised mid-caps into stocks with “great history, purported future, and those with no history and possibly (no) future”.
In the past three and six months, the Nifty Midcap 100 has surged by 20% while the Nifty Smallcap 100 has risen by 23%. Domestic equity mutual funds have witnessed significant inflows in their mid- and small-cap schemes, reflecting bullish investor sentiment. Notably, 6.4 million new folios were opened in mid-cap and small-cap equity mutual funds in the past since March 2022, registering a 34% growth.
“Specific segments — industrials, capex, defence, and railway PSUs seem overextended on valuations. Investors will need to exercise caution and keep bottoms-up risk-reward perspective in mind while investing in mid- and small-cap stocks,” says Gautam Duggal,a head of research - institutional equities, Motilal Oswal Financial Services.
source:et
Sep 21 2023, 10:31
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