Nifty Microcap 250 up 75% in a year, real estate index up 112%: Motilal

he Nifty Microcap 250 and Smallcap 250 indexes, tracking the smallest companies in the market, surged by an impressive 11.56% and 7.90% respectively in June 2024

India's stock markets witnessed a strong showing in June, with smaller companies leading the charge. According to a report by brokerage firm Motilal Oswal, the Nifty Microcap 250 and Nifty Smallcap 250 indexes emerged as the top performers, recording impressive monthly growth of 11.56% and 7.90%, respectively.

Source: Motilal Oswal

The Nifty Microcap 250 index, which tracks the performance of the 250 smallest companies within the Nifty 500 universe, has been on a tear.  This index has delivered significant returns over various timeframes, with a staggering 21.51%, 23.48%, and 75.24% growth in the last 3 months, 6 months, and 1 year, respectively.

 

The Nifty Smallcap 250 index, representing the next rung up the market capitalization ladder, has also shown robust performance. It clocked returns of 19.40%, 21.86%, and 62.28% over the last 3 months, 6 months, and 1 year, respectively.

While smaller companies stole the limelight, the performance across other market segments was positive as well. The Nifty Midcap 50 index grew by 7.89% in June, with longer-term gains of 17.26%, 21.99%, and 55.45% for the last 3 months, 6 months, and 1 year respectively. The Nifty 500 index, encompassing the broadest range of companies, also witnessed growth of 6.90% in June, with gains of 11.38%, 16.11%, and 37.31% over the last 3 months, 6 months, and 1 year respectively.

All sectoral indices posted positive performances, with the IT sector rebounding from its prolonged slump to lead with a return of 11.7% followed by Consumer Durable at 9.19%.

The Realty and Auto Sector too have seen a positive growth of 8.37% and 7.60% respectively. However, reality sector has shown a growth of 112.45% in 1 year.

Energy sector has grown 3.81% in June. However, in the last one year, it has grown 69.21%

Banking and Healthcare have seen a similar growth of 6.86% & 6.62% in June.

Metal on the other hand has slumped and grown just  0.93% for the month of June.

The elections in India caused a volatile month in the stock market, with prices fluctuating wildly. Investors seeking stability flocked to factors that prioritize steady companies. Low Volatility factors, which focus on stocks with historically minimal price swings, came out on top with a 6.6% return. Quality factors, which target companies with strong financials and consistent earnings, also performed well with a 4.12% gain. While factors like Momentum (recent price surges) and Enhanced Value (undervalued stocks) still saw positive growth (around 3%), they didn't outperform the focus on stability during this uncertain period.

All sectors contributed positively to the Nifty 500, with Financial Services, Consumer Discretionary, and IT being the top three, collectively adding 4.3% to its gains.

"Monetary policy actions have consistently driven down annual retail inflation in both the US and India. Both FIIs and DIIs remained net buyers, capitalizing on the volatility of the election month by deploying a total of Rs. 56,986 crores across equity and debt segments.  Unemployment hit a seven-month peak at 8.9%, spurred by a notable increase in rural joblessness," said Motilal Oswal in a note. 

In the US, the S&P 500 and NASDAQ 100 continued their positive performance, delivering returns of 3.5% and 6.2%, respectively.Taiwan continued to be the best emerging markets with a growth of 11.5%, while Brazil stood as the worst performer with a fall of 4.5%. France was the worst performer among the developed markets and witnessed a fall of 7.7%.

Globally, crude oil prices increased by 5.9% in June, following the surge in global demand, geopolitical tension in the Middle east and seasonal weather patterns.  Silver lost its luster, experiencing a 6% decline, while gold held steady without significant change. Bitcoin and Ethereum both fell by 10.6% and 10.2% respectively.