The Hindu Business Line : BSE's A group stocks outperform others

MID-cap stocks have had a rollicking time since September 2001, when the markets sank to a low in the aftermath of the terrorists' strike in New York.

The CNX Midcap index has outperformed the Nifty, the large-cap index, by a factor of two since then. It will, however, be a mistake if you take that to mean that all mid-cap stocks have done better.

BSE statistics reveal that the aggregate market capitalisation of A group stocks, an index of wealth, has recorded the most gains in the period between September 2001 and August 2004. The cumulative wealth of B1 group stocks has also risen at a blistering pace, but the growth rate is still below that of A group stocks.

The appreciation in the wealth of the rest of the market, which includes stocks from B2, Z and trade for trade groups, has been poor.

Since the beginning of 2003, however, B1 group stocks have appreciated more than A group stocks, while the rest of the market has continued to languish.

The pattern suggests that mid-cap stocks in A group started attracting buying interest in the beginning and only gradually did it filter down to the mid-cap stocks in the B1 group. Statistics also reveal the peril of investing in stocks outside ofA and B1 groups even during a bull market.

The performance of A group stocks is all the more impressive since the fluctuations in returns have been significantly less than that of B1 group stocks.

For the September 2001 to August 2004 period, monthly changes in the wealth of A group stocks have, on an average, been between positive 12 per cent and negative 6 per cent. In contrast, monthly changes in the wealth of B1 group stocks have been between positive 18 and negative 12 per cent. The statistics indicate that A group stocks have remained the best place to build wealth over the past three years.

More Stories on : Stock Markets | Stock Markets

Article E-Mail :: Comment :: Syndication :: Printer Friendly Page

Stories in this Section
All outsourcing cannot be stopped: Kerry

Air Deccan drops trunk route fares by 20 per cent

Govt tightens metallic scrap import policy

BSE's A group stocks outperform others

Seeking safe haven in US commodity futures

Markets nervous over `cocktail of concerns'