Small stocks continue to deliver big gains in 2022
Clock 60% gains on Dalal St in 2021; Midcap index gained 37.41%, smallcap index zoomed 59.81%
image for illustrative purpose
New Delhi: Stock market minnows put up a stellar show in 2021 giving returns of up to 60 per cent amid Dalal Street dream run and are likely to continue sailing northwards in the New Year too. Trumping pandemic-induced uncertainties, the Indian equity market posted stunning gains this year achieving several feats and smaller stocks benefited the most from the strong momentum. From reaching the momentous 50,000-mark in January to scaling 61,000-level in October, the BSE Sensex had an epic journey this year. Till December 28 this year, the midcap index gained 6,712.46 points or 37.41 per cent while the smallcap index zoomed 10,824.78 points or 59.81 per cent.
In comparison, the BSE Sensex jumped 10,146.15 points or 21.24 per cent. "We are in a structural bull market where midcap and smallcap stocks tend to outperform. It was a very tough period for midcap and smallcap stocks from the beginning of 2018 to March 2020 because of the announcement of Long-Term Capital Gains (LTCG) and regulatory changes in the mutual fund industry therefore valuations were attractive." "Major announcements of economic reforms are also leading many small companies to witness stellar growth," Parth Nyati, Founder of Tradingo, said. The record-shattering rally on Dalal Street came amid massive liquidity support from global central banks, large scale vaccination drive and favourable domestic economic policies.
The midcap index zoomed to its all-time high of 27,246.34 points on October 19, 2021. In a similar fashion, the smallcap index jumped to its record high of 30,416.82 on the same day. The 30-share benchmark also reached its all-time high of 62,245.43 on October 19.
