New Delhi: The Nifty Midcap index (Midcap100) ended at a record closing high on Monday after a strong rally in financial and metal stocks on the National Stock Exchange (NSE).
The index closed at 16,174, up 0.84%, surpassing its previous high of 16,076 on October 5, 2016. In intra-day trade, the index hit a high of 16,225.
In comparison, the Nifty 50 index ended 0.69% higher at 8,801 and is 2.2%, or 195 points, away from its record high close of 8,996 on March 3, 2015. The index hit an all-time high of 9,119 in intra-day trade on March 4, 2015.
The midcap index has outperformed the market by gaining 17.5% from its recent low of 13,762 on December 26, against a 11.3% gain in the benchmark index. After Budget, it rallied 5% in the past four trading sessions as compared to a 2.8% rise in the Nifty 50.
Domestic institutional investors have pumped a net Rs 11,255 crore into equities since December 26, stock exchange data shows.
Bharat Financial Inclusion, Union Bank of India, Bajaj Finserv, Bajaj Finance, IDBI Bank, Dewan Housing Finance Corporation, Bank of India, DCB Bank, Jindal Steel and Power, Steel Authority of India, Hindustan Zinc and JSW Steel rallied more than 25% during the period.
Adani Enterprises and Adani Power, Sun TV Network, Ramco Cement, DLF and Sintex Industries are among the stocks that surged more than 30%. Bajaj Finserv, Biocon, Godrej Industries, Indraprastha Gas, Jubilant Life Sciences, Natco Pharma, Sun TV Network and Vakrangee hit their record highs on the NSE on Monday.
Though analysts believe the markets could see higher levels, they suggest investors book profits at regular intervals, especially in mid-caps.
“The large-cap index is looking more attractive, given the valuation comfort. Over the last few years, there has been valuing unlocking in the mid-cap segment. As a result, this segment has attracted investments from domestic and foreign players,” says Amar Ambani, head of research at IIFL.
“Companies, too, have done well operationally and have grown over the years. Having said that, a number of large-cap companies have been facing headwinds, for example, the information technology sector. In the mid-cap segment, one now needs to be stock specific,” he adds.
A total of 50 companies from the Nifty Midcap index that has thus far announced their October-December quarter results have posted an average 11.5% year-on-year growth in aggregate net profit at Rs 8,980 crore. These companies had a combined net profit of Rs 8,054 crore in the same quarter a year ago.
G Chokkalingam, founder and managing director of Equinomics Research, maintains a cautious view on the mid-cap segment. “The sharp rally is a reason to worry. The problem is that not much FII money is coming into Indian equities. Domestic funds are chasing stocks now, and they are focusing on the mid-cap segment. This party will not last for long,” he says.
“This is a good time to book profits and remain invested in those stocks where there is valuation comfort. Once FII flows resume, investors will focus on large-caps and then the money will flow out of the mid-cap segment,” he adds.
Ipca Labs, Mahindra Holidays, KEI Industries, KEC International, RBL Bank, IndusInd Bank, YES Bank, Minda Industries, Gulf Oil, PNC Infra are some of the stocks Ambani of IIFL likes at their current levels.