The Nifty Midcap 100 index, which saw its biggest one-day fall in over a year on Wednesday, rebounded and rose 0.6% to 44,300 on Thursday.
Meanwhile, the BSE Smallcap index gained close to 1% to 41243.07 points after witnessing a more than 3% cut in the previous session.
Equities witnessed broad-based selling on Wednesday as weakness in global markets amid geopolitical tensions and rising COVID-19 cases triggered profit-booking across the board.
The benchmark Nifty 50 and Sensex slumped more than 1% on Wednesday, registering their biggest single-day fall in over 9 months.
While equities extended losses in early trade Thursday, they have rebounded and are trading flat.
Mazagon Dock Shipbuilders, JSW Energy, NHPC, Coromandel International, Oil India, Indian Railway Finance Corporation, and Sona BLW Precision were the major gainers in the midcap space, rising 3-6%.In the smallcap segment, Zensar Technologies, Morepen Laboratories, PC Jeweller, Metropolis Healthcare, Arman Financial Services, HBL Power Systems, and Tarsons Products surged 5-10%.
Smallcap and midcap segments have outperformed the largecap peers by a significant margin in 2023, taking valuations above their historical averages.
Year-to-date, the BSE Smallcap index has rallied 43% and the Nifty Midcap 100 gained 41%.
The earnings growth in the small and midcap companies over the last few quarters has been pretty strong and this drove the sharp rally in stock prices.
Infact, there has been some exuberance in certain pockets and the upmove in stocks has been more than their earnings growth.
As a result, several money managers have been ringing alarm bells, but the retail frenzy looks unstoppable.
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