During the year, while benchmark Sensex rose nearly 15 percent, the BSE midcap index fell 3 percent and the smallcap index cracked 8 percent in this period.
The year 2019 remained volatile for investors with the benchmarks Sensex and Nifty scaling record highs largely driven by large-cap stocks even as the broader markets remained sluggish.
The underperformance seen in the broader markets was largely due to their high valuation, economic slowdown, and muted earnings growth. Concerns in the financials space, the slowdown in demand and the liquidity crunch also added to the woes.
During the year, the BSE Sensex rose nearly 15 percent, the BSE midcap index fell 3 percent and the smallcap index cracked 8 percent in this period.
In the decade as well, large-cap stocks have outperformed the mid- and small-cap stocks by a wide margin. The Sensex rallied 133 percent in the last 10 years as compared to 109 percent and 48 percent, respectively by BSE midcap and smallcap indices during the same period.
In the BSE Midcap index, over 55 stocks declined in 2019 as compared to 45 stocks giving positive returns, while in the BSE Smallcap index 536 stocks were in red, while only 163 stocks gained in this time.
However, some stocks defied the broader market downtrend in 2019 to deliver over 50-100 percent returns for the year.
In the midcap index Reliance Nippon AMC, Info Edge, Whirlpool, Adani Transmission, Indraprastha Gas, ICICI Securities, and Berger Paints rose over 50 percent in the year.
Meanwhile in the smallcap index, Adani Green surged over 270 percent, while Seamec, Iris Mediaworks, Aavas Financiers, Garden Reach Ship, Tanla Solutions, Cantabil, and CreditAccess Gramin doubled investor wealth in 2019.
However, among wealth destroyers, 109 stocks in the BSE smallcap index lost over half the investor wealth, down over 50 percent for the year. Cox & Kings, Talkwalkars Lifestyle, Mcleod Russel, Sintex Plastic, Kridhan Infra, Reliance Capital, Reliance Communications, Reliance Home Finance, Mercator, DHFL, Sintex Industries, Ballarpur Industries, and Reliance Infra lost over 90 percent in this time.
In the midcap space, the lowest 10 stocks corrected 40-55 percent in 2019 which included Indian Bank, PNB Housing, Indiabulls Ventures, Central Bank of India, Glenmark Pharma, MRPL, Varroc Engineering, NBCC, RBL Bank, and BHEL.
But, as per analysts, the scenario is expected to change in 2020 due to government measures announced recently like corporate tax cuts. They also hope the government will announce more accommodative measures in the upcoming Budget.
Hopes of economy revival and countering the slowdown may also help uplift the stocks, they said, adding that investors should focus on quality midcaps and add them to the portfolio with a medium-term perspective.
First Published: IST