August 11, 2015

Why the mid-cap mania should worry you

Will it be different this time? The mid-cap index is again running ahead of the benchmark index. Whenever in the past that has happened for a long-stretch — whether in 2008 or 2010 or 2013 — the market has corrected subsequently.

To be specific, the BSE Mid-cap index has outperformed the BSE benchmark Sensex by 26.6 per cent since April last year, in its biggest and longest period of outperformance since the Mid-cap index data became available in 2005. The index has risen 58 per cent since April 2014, compared with the 25 per cent appreciation for the Sensex and 27 per cent for the National Stock Exchange’s Nifty during the period.

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