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Back in the game! Broader markets outperform in 2020; 35 BSE500 stocks rally over 20%

Updated : January 16, 2020 02:49 PM IST

Starting 2020, even small and midcaps, which underperformed in 2019, have constantly risen more than the benchmarks.

The S&P BSE Sensex has rallied 1.5 percent in 2020 compared to nearly 7 percent surge in the S&P BSE Smallcap index.

In the BSE500 index, 398 out of 500 stocks have given positive returns for 2020, while only 102 stocks fell.

Indian shares have been on a record run since December. Starting 2020, even small and midcaps, which underperformed in 2019, have rallied more than the benchmark indices.

The S&P BSE Sensex has rallied 1.5 percent in 2020 compared to nearly 7 percent surge in the S&P BSE Smallcap index, and over 4 percent gain in the S&P BSE Midcap index in the same period.

The year 2019 had witnessed a lot of polarisation with only major largecap contributing to index gains. However, investors are now moving beyond the top 50 stocks. According to the analysts, 2020 could well be the year of mid and small caps as the economy is showing signs of improvement.

"We expect that the valuation gap between midcaps and large caps will narrow depending on the macro recovery. If growth becomes broad-based from here, midcaps could continue to outperform Nifty in the coming months," Credit Suisse said in its latest report.

"We do not expect further downside in midcaps as valuation froth has settled and the sharp underperformance provides selective opportunities in quality midcaps," it added.

According to JM Financial, the drivers for the current midcap rally are momentum on domestic flows and earnings outlook. The brokerage retains its bias towards largecaps in the medium-term, though certain stocks in mid/small cap look attractive.

ICICI Direct also said the quality stock selection approach will continue to find favour rather than an index specific approach.

In the BSE500 index, 398 out of 500 stocks have given positive returns for 2020, while only 102 stocks fell. Of these, about 35 stocks have jumped over 20 percent in only 11 trading sessions.

Indiabulls Wholesale, Indiabulls Real estate were the top gainers in the index, surging 59 percent and 55 percent, respectively in new year. Meanwhile, Suzlon Energy, Jindal Saw, Inox Wind, IEX, Birla Corporation, Avanti Feeds, and Jai Corp rose between 25 percent and 40 percent.

Other gainers that rose more than 20 percent included MMTC, IRB Infra, Rain Industries, Welspun Corp, New India Assurance, JK Lakshmi Cement, Centrum Capital, Hindustan Copper, VA Tech Wabag, and Blue Dart.

Meanwhile, major losers such as Reliance Power, Reliance Infra, Reliance Capital, Coffee Day, Indisbulls Ventures, and Yes Bank were down between 14 percent and 47 percent in the year.

Disclaimer: CNBCTV18.com advises users to check with certified experts before taking any investment decisions

Back in the game! Broader markets outperform in 2020; 35 BSE500 stocks rally over 20%

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