India's benchmark indices, the S&P BSE Sensex and the Nifty, scaled new lifetime highs at 41,858 points and 12,333 points, respectively, on Monday. The week's first trading session was supported by an improvement in the overall sentiment after the index of industrial production (IIP) recorded a growth of 1.8% in November, indicating better economic outlook after three consecutive months of decline.
The top gainer of the day was Infosys, which last Friday said its investigation into whistle-blower complaints had found no evidence to support the allegation of governance failures and financial wrongdoings on the part of the company's top leadership. The blue-chip IT firm also beat Street estimates in its third quarter earnings announced on Friday after trading hours.
While there are reports indicating that global retail major Walmart may be restructuring its India operations in the face of low growth visibility, home-bred company Avenue Supermarts (which operates DMart stores) posted a strong earnings show in the third quarter, with net profit growing 53% to ₹394 crore, supported by a 24% jump in revenues to ₹6,752 crore on a year-on-year basis.
The broader market also performed well on Monday. The BSE MidCap and BSE SmallCap rose 0.81% and 0.93%, respectively, reaffirming market mavens' conviction of stellar returns from this category in the months ahead.
A. Balasubramanian, MD and CEO, Aditya Birla Sun Life AMC expects small- and mid-caps to outperform in the coming years. "It is purely the valuation of this segment vis-à-vis large companies. Second, interest rate reduction should ultimately benefit this segment of the economy in the form of reduction in their borrowing costs. Recently, the government has been engaging aggressively in driving the benefit for small sectors in the broad economy. Specific focus such as loan mela, and steps that are being taken to bring stability in the NBFC sectors should help in reviving the sentiment soon. While this segment has done badly in the last two years for a variety of reasons, for the reasons stated above, this segment holds potential to deliver better performance in the years to come," he had said in an interview with Fortune India.
