Small, mid-cap indices beat larger peers in 2012 so far

After suffering a heavy blow last year, the mid-cap and small-cap indices bounced back smartly and recorded gains of up to 31.37 percent as compared to large-caps' 21.42 percent rise this calendar year.

Updated: Nov 28, 2012, 18:11 PM IST

Mumbai: The BSE mid-cap and small-cap indices have beaten their larger counterparts in terms of delivering returns in this calendar year so far.

After suffering a heavy blow last year, the mid-cap and small-cap indices bounced back smartly and recorded gains of up to 31.37 percent as compared to large-caps' 21.42 percent rise this calendar year.

Large-caps have the highest market value, followed by mid-caps and small-caps.

While the mid-cap index of the BSE has given a return of 31.37 percent since the beginning of 2012, the small-cap index has gained 29.28 percent.

In comparison, the gain in the blue-chip barometer index BSE Sensex has been much lower at about 21.42 percent, as per data available with the BSE.

According to market experts, during uncertain times mid-cap and small-cap counters witness bigger losses but when markets rally, these stocks move ahead of the frontline stocks.

"There has been a sporadic move in the markets in last five-six months. In the last few months, markets have seen many consolidations and generally when you have prolonged consolidation, one see mid-caps and small-caps running higher than blue-chip scrips," Ambareesh Baliga, COO, Way2Wealth said.

Mid-cap and small-cap stocks are generally looked at by local investors, whereas overseas investors' largely prefer to invest in large-cap stocks, he said adding that sectors like aviation and media have fared well in the recent past.

The mid-cap indices track the performance of companies with market value that are a fifth of blue-chip firms (large-caps), while the m-cap of small-cap firms are of almost one-tenth of an average large-cap stock.

Most stocks in the mid and small-cap segments were beaten down heavily during 2011, falling 34 percent and 42 percent, respectively. On the contrary, the Sensex had lost about 25 percent during the same period.

PTI