An experiment shows how easy it is to create the illusion of “market genius” by only counting the winners: after each round, the group that was wrong simply disappears, so the remaining universe naturally boasts perfect results. The same mental trap distorts equity investing, where investors fixate on the rare 10x to 100x winners while ignoring the massive failures that made those wins possible. Using Indian stock data since 2000, odds of 5x gains depend heavily on when you enter.
Smallcap shares surged up to 7% on Wednesday, with names like IIFL Finance, Meesho, and GRSE outperforming benchmark indices. The move came even as investors stayed cautious elsewhere, yet the Nifty Smallcap 100 index posted strong gains. Market experts pointed to improving expectations for mid and smallcap earnings, treating recent pullbacks as entry opportunities.
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Indian markets logged a second straight session of losses as fresh Iran US escalations weighed on sentiment. The Sensex fell 516 points to 77,328, while the Nifty 50 dropped 150 points to 24,176, both ending over 0.6% lower. But smallcaps stood out, closing in the green and outperforming the benchmarks despite the broader slide.
Smallcap and midcap stocks outperformed benchmarks on Friday, with certain shares jumping as much as 16% even as the broader market stayed shaky. Analysts point to earnings momentum and company-specific catalysts driving the rally, while geopolitical tensions and high oil prices kept sentiment cautious. Traders are now watching volatility closely for follow-through.
The Nifty Smallcap 100 jumped 18.4% in April, marking its third-biggest monthly gain since launch. Market history hints that this momentum can extend over the next 12 months, but analysts warn upside may be limited by richer valuations. Still, many experts expect small-cap outperformance over 18-24 months, despite the current valuation gap versus past cycles.
Indian markets are holding steady after election results, with Sandip Sabharwal pointing to governance and policy continuity as key supports. He says banking stocks are consolidating, yet asset quality remains strong. The earnings season is expected to reward select names, especially auto and power equipment makers, while small and midcaps continue to outperform on persistent domestic flows.
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Foreign institutional investors turned cautious markets into an opportunity, increasing holdings in 54 beaten-down smallcap stocks during the March quarter. While broader sentiment stayed wary, FIIs leaned into a “buy the dip” strategy, stacking capital in stocks they view as temporarily mispriced but structurally sound. The push also stood out because some other smallcaps saw exits instead.
Siddharth Vora says the market looks more attractive after a recent correction, prompting a shift toward smallcaps. His portfolio stays overweight in metals, power, and materials, while he continues to avoid IT. In a contrarian move, he points to oil marketing companies following his exit from ONGC.
Indian markets are attempting a rebound with investors increasingly confident that the worst of war-related uncertainty may be behind them. Edelweiss AMC expects a gradual normalization by April, but flags a key risk: if oil prices stay elevated, the recovery could face economic pressure. Meanwhile, midcaps and smallcaps are drawing fresh attention thanks to attractive valuations.
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