Mumbai: The small cap stocks have stolen the lime light on the domestic bourses in the recent rally with over 160 stocks hitting their 52-week high even as large cap stocks are finding stiff resistance at higher levels.
The strong rally in small cap stocks has also helped the BSE small cap index to hit an all-time high last week while the BSE mid cap index is just 245 point away from its lifetime high.
On the other hand, the 30-share BSE Sensex is still 1690 points away from its record high of 30,024.74, hit on March 4, 2015.
The continuous flow of funds from domestic investors is the primary reason behind the sharp surge in the prices of small and mid cap stocks. However, experts are advising caution as the rally is largely liquidity driven and the corporate fundamentals are yet to keep pace with the valuations.
“It is more a liquidity driven rally than a fundamental one. The relative out-performance of small cap stocks are attracting small investors towards mutual funds schemes focussed on small and mid cap stocks,” said Ambareesh Baliga, senior research analyst.
