Only few are driving the market, remaining all are laggards.
Extreme divergence in large, Mid & Small Cap companies in terms of fall.
Small & Mid cap still down from peaks despite recent pullback.
Change in institutional holding from Dec 31 to june 2019. The no.of stocks availability in segment is more than large cap or bluechip.
Divergence between Nifty 50, Nifty mid cap and Small Cap is also at Historical Extreme.
Mid cap stocks market cap at 5 year low. However it still making money means the gap of cash flow and valuation is clear & visible. Valuation corrected back to 2014 lows.
Small Cap valuations also at 2014 Low.
Improving liquidity and reducing interest rate have helped midcaps in the past. At present looking into government situation and commentary along with inflation rate we feel that interest rate may further cut.
We believe it may poised to take off down the line next 3 year plus time horizon.
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