Market cap fall Rs 6 lakh crore, still select mid-caps outperform markets!

Indian equity markets continued the sharp sell-off for the sixth straight trading session on Friday. Following global markets, the benchmark indices Sensex and Nifty have lost up to four per cent each from February 20 till the end of Thursday’s trading session. Select stocks have performed exceptionally-well even during this sell-off.

The data sample of 660 companies with the latest market cap above Rs 1,000 suggested that even in this sharp fall, there are a few outperformers here. Before going to these stocks, we must remember that Indian equity markets, in the sharp fall, have eroded more than Rs 6 lakh crore market caps in the time frame of just one week, showing the depth of the fallen sentiment.

Stocks such as India Cements, BASF India, Dollar Industries, IOL Chemicals & Pharmaceuticals and Navin Fluorine International have gained as much 33 per cent, 27 per cent, 17 per cent, 16 per cent and 15 per cent, respectively. The out performance in these stocks is largely led by the stock specific actions and news flow. For example, India Cements reacted to the news of stake increase by the market veterans. Few other players such as Mishra Dhatu Nigam Ltd, Tube Investments of India, Aarti Drugs also gained in double digits during the period under observation. The market leaders such RIL, HDFC, ICICI Bank etc, on the other hand, fell as much as 6.7 per cent, 4.1 per cent and 5.8 per cent, respectively.

Gains in such stocks suggest that the investor can find the right opportunity in select stocks. In addition to this, the noticeable part of these stocks in the correct mid-cap stock can be expected to yield returns even in the falling markets.