Ownership of smallcap stocks by institutions such as mutual funds has risen drastically, which makes the current rally much more stable compared to earlier ones, says B Gopkumar, MD and CEO, Axis Mutual Fund
“It is not right for us to conclude that midcap and smallcaps are in a bubble. Yes, they have done well and the most interesting part is if you look at the corporate results for last quarter, companies have performed well and that is probably leading the rally in midcaps and smallcaps.”
"Promising business outlook, near-monopoly status, and the governments Make-in-India drive first pushed railway stocks, followed by defence, and now mining. Hugh cash on books, dirt cheap valuations etc. were an added advantage for the rally."
“I am really looking for further triggers for the stock market to move up from these levels. Intuitively, you do feel that there should be a correction, it could be healthy, shake out a lot of the weak players and provide an opportunity to get into good quality businesses at reasonable valuations, with margin of safety.”