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Illustration: Binay Sinha
The S&P BSE Midcap index hit a new high of 40,685.56, gaining nearly 1 per cent in Wednesday’s intraday trade, after a strong rally seen in the power, pharmaceutical and consumer durable sectors companies.
The S&P BSE Midcap index traded higher for a third straight day, surging 3.5 per cent during the period. On Tuesday, the index surpassed its previous high of 40,282.49 touched on February 8, 2024. With Wednesday’s gain, the midcap index on the BSE has bounced back nearly 10 per cent from its March low.
Besides the year-end profit booking, the sentiment in March as regards broader markets, reports suggest, was also dented given Sebi’s word of caution against the froth/excessive valuation building in the mid, small-caps.
Meanwhile, Laurus Labs, Indian Renewable Energy Development Agency (Ireda), Petronet LNG, Tata Elxsi, Whirlpool of India, JSW Energy, Tata Technologies and Schaeffler India have rallied between 5 per cent and 8 per cent since their March lows.
Shares of Ireda were also locked in upper circuit for the second straight day, up 5 per cent at Rs 157.20 after the state-owned clean energy financier posted record loan growth for the recently concluded financial year of 2023-24 (FY24).
In an exchange filing, released post market hours on Monday, Ireda said it had recorded the highest-ever loan sanctions worth Rs 37,354 crore in FY24, while loan disbursements stood at Rs 25,089 crore. With this, total loan book stands at Rs 59,650 crore, a record growth of 26.71 per cent.
Voltas and Whirlpool of India from the consumer durables have rallied 3 per cent and 5 per cent as Indian Meteorological Department (IMD) said in its report that there is a fear of severe heat in Central India in April.
Analysts at Sharekhan, too, expect the rally in the broader markets to continue for some more time. The Nifty50 index, they said, hit a new high recently, and the broader markets, too, were expected to follow suit.
The March 2024 quarter (Q4-FY24) earnings for companies in these two market segments, they believe, are likely to be good, which in turn can propel these stocks higher for some more time.
“Typically, the rally in the broader markets lasts 16 – 22 months. Right now, the up move has lasted for around 17 months. So, from the upper mark of 22 months, we still are a bit far away. The rally in the broader markets can go on for another 4 – 6 months. Global cues are also supportive. That said, one needs to be selective as this could be the last phase of the rally in the mid-and small-caps. Historically, the fall in these two indexes post the prolonged rally has been to the extent of 30 – 35 per cent,” said Gaurav Dua, senior vice-president, head of capital market strategy & investments at Sharekhan by BNP Paribas.
First Published: Apr 03 2024 | 2:56 PM IST
