Nifty midcap continues to rise for 12th session in a row, gains 7.3%

The Nifty indices for small- and mid-cap stocks clocked gains for a 12th consecutive day on Monday and yielded returns of 8.9% and 7.3%, respectively during the period as investors lapped up beaten-down stocks from the two categories.

The 12-day rally has also helped both indices to pare their year-to-date (YTD) losses to 16.5% and 9.2%, respectively. From the beginning of 2018 to mid July, the two gauges fell by as much as 23.3% and 16%, respectively.

The Nifty small-cap index ended the session at 7,597.35, up 0.21%, while the mid-cap gauge closed at 19,199.20, up 0.45%.

Sentiment also got a boost after better-than-expected earnings posted by a section of companies buoyed investor optimism about the outlook for their profit growth.

The Adani Power stock, which rallied the most in the last 12 sessions by rising 48%, added another 3.13% on Monday after the power company reported a lower-than-expected loss for the quarter ended June 2018.

The company reported a loss of Rs 825 crore against the Bloomberg consensus estimated loss of Rs 1,166 crore for the quarter.

Dilip Buildcon’s share price has risen 34.6% since July 19, Aditya Birla Fashion and Retail (ABFRL) followed by a 32% gain.

Vakrangee and PC Jeweller, which have lost more than 80% of their value since the beginning of 2018, also featured in the list of top performers in the last 12 sessions.

ABFRL posted an unexpected profit of Rs 5.6 crore for the first quarter of FY19, helped by the strong performance of its Pantaloons stores.

Analysts had projected a loss of Rs 16.34 crore for the three months ended June 2018.

ABFRL remains one of the top picks of Jefferies, which has a buy rating on the stock. The investment bank recently observed that while Q1 revenues were slightly better-than expectations, Ebitda, which grew 54.7% year-on-year, surpassed their expectations.

“ABFRL is showing signs of turnaround across segments and remains best placed to fight the increased competition given strong brands across price points, format and distribution (e-commerce contributes high single digit to Madura)”, Jefferies said in a note post the company’s results.

On Monday, shares of Indiabulls Ventures climbed to their life-time high of Rs 639.75 on NSE.

The stock has recorded over two-fold increase in 2018 so far after gaining nearly 13 times in 2017.

Among the Nifty small-cap stocks, Reliance Naval and Engineering, Sintex Plastics Technology, Trident and Gujarat Alkalies & Chemicals rallied in the range of 37.5% and 30% between July 19 and Monday, while the broader Nifty50 rose 3.9% during the same period.