Mid caps to Rally For Next Few Months

UMBAI: The benchmarks are facing some resistance after moving closer to all-time high levels. As the valuations in benchmarkstocks are looking stretched, institutional investors have started investing in stocks from broader markets which are available at attractive valuations. 

While, the S&P BSE Sensex has gained 11.38 per cent in the last one year, the S&P BSE Midcap Index has corrected 11.02 per cent and the S&P BSE Smallcap Index is down 19.12 per cent in the same period. 

However in the last one month, the BSE Midcap Index and the S&P BSE Smallcap Index have gained 4.56 per cent and 5.75 per cent respectively against 2.7 per cent rise on the Sensex. 

Mitech Thacker, Technical Analyst, is of the view that the Nifty Midcap index is getting past its 200-day average and so there is where the good amount of action could be seen. 

According to analysts, large midcaps may not report robust earnings in the the near term due to macro economic situation but they can be bought at current levels. 

"Midcaps may not deliver immediately, but you have to take a call from a 12 to 24 months' perspective. If you believe that things will improve in the second half of the year and going forward, then today is the time for you to buy into the large midcaps which are available at reasonable valuations," said Krishna Kumar Karwa, MD & CFO, Emkay Global Financial Services. 

Stock Market Tips Provider And Commodity Tips Provider Market Prophecy Also Predicting Same Thing.

Investment advisor, Gul Tekchandani, is of the view that it is a right time to enter midcaps as they can surprise with 20-40 per cent rally in a week's time. 

"I am personally looking at some of the midcaps which have been beaten down. They are quality businesses, limited debt, high return on equity and capital, and good balance sheets," he said. 

"Midcaps perform all of a sudden. The growth of midcaps cannot be captured because there is growth in the business. We can see a sudden jump of 20-40% in a week, he added. 

Sudip Bandyopadhyay, President, Destimoney Securities, expects midcaps predominately focussed either on exports or on local consumption theme are good picks to buy.