Share Market News / Small cap stocks created havoc in the stock market, mid caps also dominated

Share Market News: The year 2024 has been quite encouraging for Indian stock market investors, especially small cap stocks attracted investors with their excellent returns. Market experts believe that this boom in the Indian stock market is attributed to strong domestic cash flow, sustainable structure of the Indian economy, and policy continuity. This year the BSE Sensex, Midcap and Smallcap indices made many historical records. Experts say that this trend may continue next year as well, in which the performance of midcap and smallcap companies will be based on domestic consumption and government infrastructure projects.

Unprecedented growth of Smallcap and Midcap indices

As of 23 December 2024, the BSE Smallcap index registered a gain of 28.45% (12,144.15 points), while the Midcap index showed a growth of 25.61% (9,435.09 points). During the same period, the BSE Sensex also registered a gain of 8.72% (6,299.91 points). This rally not only reflects the stability of the Indian market, but is also a testament to the growing confidence of investors.

Key reasons: Policy support and domestic consumption

Regional growth and policy support: According to Palka Arora Chopra, Director, Master Capital Services Limited, "Regional growth, policy support and investor interest were the basis for the strong performance of the smallcap and midcap indices."

Contribution of key sectors: Sectors such as real estate, infrastructure, healthcare and renewable energy, which have a significant share in these indices, benefited from government initiatives and favorable market conditions.

Impact of domestic consumption and PLI scheme: Increase in domestic consumption and the Production Linked Incentive (PLI) scheme boosted the income of small companies, strengthening their financial position.

Lifetime high of smallcap index

The BSE Smallcap index hit its lifetime high of 57,827.69 points on December 12 this year, while the midcap index hit a record high of 49,701.15 points on September 24. The Sensex also hit its highest level of 85,978.25 points on September 27.

Contribution of domestic investment and SIP

Sunil Nyati, Managing Director, Swastika Investmart Ltd, said, "Domestic liquidity was a major contributor to the success of the midcap and smallcap segments. In particular, record inflows of SIPs (Systematic Investment Plans) in midcap and smallcap funds gave stability to this rally."

Challenges and prospects

However, the BSE Sensex and NSE Nifty have faced some decline in recent months due to the high valuation of the domestic stock market. But market experts believe that this decline is necessary for long-term gains and smallcap and midcap stocks will be able to give good returns to investors next year as well.

Conclusion

The performance of smallcap and midcap indices in the Indian stock market has been phenomenal in the year 2024. Due to strong policy support, rising domestic consumption, and government spending on infrastructure projects, these indices gave attractive returns to investors. This positive trend is expected to continue in the coming year as well, which may lead to new heights in the Indian stock market.