The 30-scrip Sensex of the Bombay Stock Exchange (BSE) rose by another 281 points or 1.45% to close at a near three-month high of 19,701.7 on Monday. The Sensex has risen by 10.4% over the last 10 trading sessions.
If the rally was limited to the large caps initially, it has become more broad based over the last four trading sessions with mid cap and small caps gaining grounds swiftly.
The mid cap index and the small cap index at the Bombay Stock Exchange has risen by 5.2% and 7.7%, respectively, over the last four trading sessions while the Sensex gain in the period has been limited at 3%.
Experts, however, say that investors should carefully invest into mid caps and small caps.
“As of now the mid caps are catching up with the gains of the large cap but if the crude oil impact is transmitted into the system and there is a rise in inflation and interest rates, then mid caps would be the first ones to feel the heat as rise in input cost hurts them more,” said Pankaj Pandey, head of research at ICICI Securities.Large caps, by comparison have a better ability to pass on the rising cost impact.
In the first six days of the 10-day long rally, the Sensex outpaced the broader market as it rose by 7.2% as compared to 4% and 2.7% rise in the mid cap and small cap index at BSE.
Market participants also feel that the current run may continue till the initial set of fourth quarter results are out and crude continues to stay at elevated levels.
The 50-scrip S&P CNX Nifty of the National Stock Exchange also closed 1.41% higher at 5,908.15 points on Monday.