Small-caps steal a march over large-caps, look primed for outperformance

Moreover, the upmove in the equity markets will shift towards small-caps, the brokerage predicts

Sundar Sethuraman Mumbai
Concerns of a taper gain significance as the delta variant threatens the global economic recovery.

The only headwind against a revival of small-caps is a broad-based correction due to some extraneous factor

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Stocks in the small-cap universe have started to outperform large-caps. On Wednesday, the National Stock Exchange Nifty Smallcap 100 rose 0.53 per cent, even as the Nifty fell 0.6 per cent. This was just a persistence of a trend seen over the past month when the Nifty Smallcap 100 gained 6.1 per cent and the Nifty 2.7 per cent.
After underperforming the Nifty for 18 months, small-caps look primed for outperformance, observe analysts.
While the Nifty50 and the Nifty Midcap 100 have come close to hitting new lifetime highs, the Nifty Smallcap 100 is still some distance away, signalling more value. The index hit a record high of 12,047 in January 2022 and is currently trading at 9,938 — nearly 18 per cent lower.

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First Published: May 17 2023 | 7:45 PM IST

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