INSUBCONTINENT EXCLUSIVE:
NEW DELHI: The BSE Sensex may have scaled a fresh all-time high in early trade on Tuesday, but that has not done much to assuage the pain in
smallcap stocks, which have witnessed a severe correction this calendar.
The BSE Smallcap index is down 18 per cent year to date, against a
12.5 per cent drop in the BSE Midcap index and an 8.5 per cent surge in the Sensex.
But ace investor Shankar Sharma is not perturbed
He says fundamentals are still intact in the smallcaps
The pressure in the smallcap space has come largely from technical factors
Fundamentals in smallcaps are intact
Sharma said in a tweet on Monday.
The 30-share Sensex scaled a lifetime high of 36,902 on Tuesday
The BSE Smallcap index was up 1.74 per cent at 16,143 at around 11.10 am (IST)
From the smallcap space, stocks like Gitanjali Gems, SRS Real Infrastructure, Vakrangee, Talwalkars Better Value, JBF Industries and
Kwality have plunged over 85 per cent on a year-to-date basis, while Nelco, Excel Industries, Indiabulls Ventures, Excel Crop Care and
Firstsource Solutions risen by a similar percentage during the same period.
Market experts believe stock prices slipped mainly because while
valuations soared, with the SP BSE Midcap and Smallcap indices advancing up to 58 per cent last year, earnings did not keep up pace
accelerated the fall.
In an interaction with ETNow, Vinay Paharia of Union AMC said the market saw a monster rally in the entire smallcap
and midcap segment over four to five years
Through this phase, the smallcap and midcap indices delivered almost two-times more return compared with their largecap peer and, hence,
even after this correction, someone who had invested in some of these names has actually earned a healthy return
This is what we are experiencing now
