With the market on a bull run, small-cap and mid-cap indices are near their all-time highs. However, several stocks in the smaller market-cap segment has seen correction, according to a recent research by stock broker Yes Securities.
In the September edition of Where Money Flows, Yes Securities said that 41 per cent of the stocks in the Small Cap 250 index and 56 per cent of the small- and micro-cap stocks have dropped more than 20 per cent from their 52-week peak. Additionally, around 19 per cent of micro-cap stocks have fallen over 50 per cent.
The analysis revealed that sectors, such as metals and mining, real estate, and telecommunication in the small-cap segment have experienced notable corrections.
“There’s no clear sign of market froth, despite the Nifty hitting new highs,” Yes Securities said in the research paper.
According to the study, the recent market trends suggest no significant shift, with large-cap and mid-cap stocks continuing to perform well, while small-cap and micro-cap stocks remain underperforming compared to benchmark indices.
Sectors, such as construction, metals and mining, and textiles have witnessed a greater magnitude of correction, while healthcare and diversified businesses have been relatively immune. It is important to note that the extent of correction is only measured in the research, taking into account how much it has fallen from the 52-week high.
Other Key Data
Further, foreign institutional investors (FIIs) persist with purchases of Indian equities, with a $3,319 million worth inflow in September so far, following three months of inflows. Foreign portfolio investors (FPIs) have bought stocks from the IT and consumption sector and sold metals and mining scrips over the last two fortnights. In FY25, FPI added capital goods and consumption scrips from India into their portfolio, while selling financials and oil, according to the report.
The top-10 stocks in which mutual funds increased holdings include CDSL, Zomato, Maruti, Axis Bank, and Indigo. On the other hand, Bharti Airtel, Infosys, and Sun Pharma saw the maximum decrease in mutual fund holdings. Additionally, Visa Steels and Mangalam Organics saw the highest buying interest from their promoters.
As for sectoral performance, Nifty Pharma, Nifty IT and Nifty Consumption led the gains with 6.2 per cent, 6.1 per cent and 5.5 per cent, respectively, the study added.
