Smallcap stocks: Shares of small companies have also left behind Sensex and Nifty in terms of giving returns.
Smallcap stocks: Investors investing in smallcap stocks have made huge profits in the last financial year. In the last financial year 2021-22, smallcap stocks have given big returns of 36.64 percent to investors. In this way, the shares of small companies have left behind the Sensex and Nifty in terms of giving returns. Experts believe that this better performance of smallcap stocks will continue in the current financial year 2022-23 as well.
How did smallcap stocks perform in the last financial year?
However, the last months of the last financial year saw volatility in the market due to geo-political tensions, inflation concerns and selling by Foreign Institutional Investors (FIIs). Analysts said that the first half of the last financial year was very good, while in the second half the market had to deal with volatility. In the last financial year, the BSE Smallcap index rose 7,566.32 points or 36.64 percent. On the other hand, Midcap gained 3,926.66 points or 19.45 percent. In comparison, the Sensex has gained 9,059.36 points or 18.29 per cent in the financial year 2021-22.
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What do experts say
Parth Nyati, Founder, Tradingo said that the market is showing strong fighting ability, overcoming all concerns. We are in a structural bull market, but there may be some ‘correction’ in the market from time to time. “Traditionally, midcaps and smallcaps outperform bull markets. I believe that even in the financial year 2022-23, their performance will be better than the main benchmark, because despite all kinds of difficulties, the Indian economy is progressing.
Nyati further said that the month of April remains the best for the stock markets. Especially in the case of midcaps and smallcaps. In the last 14 out of 15 years, the smallcap index of BSE has closed with a profit. During this period, it has increased by an average of seven percent. “Therefore, we can expect a great start to the new financial year for the broader market,” he said.
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Smallcap had hit its 52-week low of 20,282.07 on April 19, 2021. At the same time, on January 18 this year, it had reached its all-time high of 31,304.44 points. Similarly, the midcap had reached its record level of 27,246.34 points on October 19 last year. It touched its 52-week low of 19,423.05 on April 19, 2021. The Sensex had reached its all-time high of 62,245.43 on October 19, 2021.
Vinod Nair, Head of Research, Geojit Financial Services, said, “Smallcaps and midcaps have emerged as good investment options due to the ‘correction’ in the broader market during the last five-six months. However, there is uncertainty regarding inflation in the near future and volatility cannot be ruled out due to the slowdown in the economy.
(Input-PTI)
