New Delhi, Sep 15 The small cap index posted its biggest single day gain in over six years on Monday after the SEBI circular on multi cap mutual funds triggered buying.
The estimates by analysts and brokerage houses indicate that the net inflow from large caps would be around Rs 27,000 crore into the small caps and around Rs 13,000 crore into the mid caps following the SEBI circular to invest 25 per cent each of assets of multi cap funds into large, mid and small cap stocks.
The huge rally in small cap stocks has come even after fund managers asked investors not to rush to buy small cap stocks in haste and there were clarifications that mutual funds have several options apart from rebalancing their schemes including a merger of schemes to comply with the circular.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services said mid-cap and small cap stocks gained sharply.
He said investors were attracted towards Mid/small caps due to the SEBI mandate to Multicap mutual funds to invest a minimum of 25 per cent each in large, mid and small cap stocks. Small Cap Index posted its biggest 1-day gain in over six years.
Deepak Jasani, Head of Retail Research, HDFC Securities said that the recent SEBI circular on allocation by Multicap schemes spurred buying in a lot of small and midcaps in anticipation of fund buying that could emerge later to adhere to the new regulation. The Nifty midcap index ended 2.6 per cent higher while the smallcap index gained 5.6 per cent - the most since May 2014.
Nifty has ended the first day of the week in the negative while the broader market has reacted positively to the latest SEBI circular, he added.
In a note to investors, Sage One has said that SEBI had done a big re-categorization of mutual funds
( With inputs from IANS )
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