Small cap stocks are on fire. In the past month, they have beaten the frontline as well as mid-cap stocks hands down. The Bombay Stock Exchange small index, which was launched on April 12, has appreciated by almost 7 per cent since its launch.
Mid-cap stocks, a favourite of foreign institutional investors (FIIs), surged 3.34 per cent during this period while the BSE 500 rose 0.35 per cent.
The BSE Sensex was up 0.93 per cent and S&P CNX Nifty declined 0.75 per cent in the past month. The huge rush to grab small cap stocks saw the volume in this segment surging almost 100 per cent in the last eight trading days of the current month.
The daily volumes, which hovered around 30-35 million shares in April 2005, increased to 36 million shares on May 1. The volumes increased further to 46 million shares on May 9 and 55 million shares on Wednesday.
On Thursday, almost 60 million shares changed hands.
The buying spree saw almost half the small cap stocks on the BSE small index outperforming the market, posting 10 per cent returns in the past month. Thirty-five per cent of them have appreciated between 1 per cent and 7 per cent while only 50-odd small cap stocks lost ground.
The rush saw the prices of one-fifth of small cap stocks surging to their 52-week highs in the last eight trading days and as many as 35 of them hit their all-time highs on Thursday.
