Amidst a sideways journey of Sensex, Nifty Smallcap Index is up almost 20% in the last 3 months and at least 18 smallcap stocks have made investors richer by delivering multibagger returns. If the BSE Smallcap index closes this week on a positive note, then this will be the longest gaining streak in its history. The quarterly results season in the smallcap space was better in Q4FY23 due to fall in input and interest costs and pickup in demand. Other factors behind the gold rush in smallcaps include: catching up with largecaps, optimism surrounding the March quarter earnings, and continued support from domestic investors, particularly through mutual funds.
The US Federal Reserve is expected to keep interest rates on hold at its meeting on 14 June. While a pause in rate hikes is expected, a decision to lift rates could lead to a sharp selloff, while a pause followed by a signal for rate cuts could lead to strong market gains.
Green Portfolio PMS founder Divam Sharma, however, keeps a distance from the gas space. He says gas stocks are highly dependent on government policies as well as the price of crude and is a very volatile space to be in