As many as 476 stocks of small and mid-sized companies did not find sellers on the Bombay Stock Exchange (BSE) on Friday even as the benchmark indices struggled to gain momentum.
One out of six traded stocks on the exchange had hit the upper circuit on 1 January boosted by a continued rally in small and mid-caps stocks. Currently, 2,951 stocks are traded on the BSE.
A strong uptrend in smallcap stocks is mainly led by inflows from retail investors, while largecaps suffered from continued selling by overseas investors, analysts said.
In 2015, over 60 smallcap stocks gave more than 100% returns for investors this year, even as the benchmark indices failed to give positive returns. While largecaps suffered from aggressive selling by foreign institutional investors (FIIs), small and midcaps witnessed heavy interest from domestic investors.
However, analysts said that largecap stocks, which were the major losers last year, still present good buying opportunities along with some quality smallcap and midcap stocks, analysts said.
Ravalgaon Sugar Farm, Victoria Mills, Loyal Textiles, Themis Medicare, Welcast Steels, Pioneer Distilleries, Saksoft, TPL Plastech, Gini Silk Mills, Orient Beverages and Schrader Duncan were among the few notable stocks that had hit the upper circuit, Business Standard reported.
Ushering in the New Year on a positive note, the S&P BSE Smallcap and S&P BSE Midcap indices ended 1% higher on the day, while the BSE Sensex was up just 0.17%.
Nevertheless, analysts expect the Sensex to hit 35,000 this year, gaining 30% compared to its closing level of 26,117.54 on 31 December 2015.
A majority of brokerage firms also expect the 50-share Nifty index to rise 38% to touch a peak of 11,000 by December 2016, according to a poll conducted by Team ETMarkets.
The rally in the indices would come from a recovery in corporate earnings growth, reforms and inflows from overseas investors, the brokerages said.
Analysts expect consolidation in the markets to continue for at least in the first half of 2016 but it could form "the base for bull run" to extend.
"Structurally the India story is still intact but because of global liquidity outflows the markets had delivered muted returns. The resilience of the Indian rupee will hopefully bring back foreign liquidity in droves, driving stock prices to higher orbits as India has the most reliable, stable and diversified economic expansion in the making," said Jimeet Modi, CEO, SAMCO Securities.