Cost advantage: While large-caps fall, mid- and small-cap stocks hog limelight

Key share indices may be lingering in the negative territory since the opening bell, investors, however, seem to stay optimistic about the prospects of mid & small-cap shares. Even as the benchmark indices remained subdued mostly reciprocating the sluggish mood in other Asian markets, the BSE Mid-cap, however, index gained 0.2 percent to 10,667.26 and small-cap index was up 0.8 percent at 10,889.15 in early afternoon trade. Against this, the BSE S&P Sensex at 1pm was down 0.3 percent or 67.07 points at 26,151.84. [caption id=“attachment_2440752” align=“alignleft” width=“380”] Reuters[/caption] Of late, when the markets witnessed a relief rally starting August 24 till date, mid & small-cap indices outperformed the benchmark Sensex. While Mid-cap index rose 2.8 percent since then, small-cap index gained 2.7 percent even as benchmark Sensex was up just 1.3 percent during the period. Investors have been reposing faith in second-rung stocks since the last quarter after several mid-cap companies posted earnings that beat market estimates. Also, the persisting meltdown in global commodity prices is expected to aid most of the small & mid-cap companies in the forthcoming earnings season as well, said market analysts, while expecting another round of subdued performance from the larger peers. “There is strong inherent potential in several mid-cap stocks due to revival symptoms in the economy. We have seen several mid-cap companies possess good quality parameters, and with cost structures coming down and more rate cuts in the offing, several of these mid & small-cap stocks will offer strong positive returns going ahead,” said Deven Choksey, MD and CEO, K R Choksey Shares and Securities. Among the gainers in the mid-cap space, shares of IDBI vaulted 10.4 percent to Rs 65.70, JP Associates flared up nearly 8 percent o Rs 10.63, Torrent Power rose 3.8 percent to Rs 170.50, Cadila Healthcare gained 3.6 percent to Rs 1,990.50 and Reliance Power was up 3.5 percent at Rs 42. In the small-cap category, shares of Prozone Intu Properties led the pack, surging 20 percent to Rs 30, Prakash Steelage also jumped 20 percent to Rs 128.60, NDL shot up 12.2 percent to Rs 129.60 and Jamna Auto Industries was up 10 percent at Rs 217.40.