Is it Time to Look at Mid-and-Small Cap Stocks after FM’s Stimulus Speech?

 

India’s two main indices, Nifty and BSE Sensex, didn’t pay heed to the stimulus package, Atmanirbhar 3.0, announced by Finance Minister N Sitharaman. The Sensex dropped 0.54% while Nifty lost 0.46%.

Market analysts are divided on the reason why: Either the market has taken the stimulus into account already or today was a day of profit booking and the market will resume its rally soon.

However, while the Sensex and Nifty dropped, the NIFTY Midcap 100 index was up by 0.41% and the NIFTY Smallcap 100 was up by 1.31%. As the FM announced measures for the MSME segment that gave a lot more clarity to the mid and small-cap stocks on the government’s efforts to support the companies in the space and increase investments. Some of the measures that will provide to the sector include:

1. A fertilizer subsidy of Rs. 65,000 crore to farmers.
2. An additional outlay of Rs. 18,000 crore Pradhan Mantri Awas Yojana (Urban) that will help start work on 12 lakh houses and complete 18 lakh houses.
3. Extension of the Emergency Credit Loan Guarantee Scheme(ECLGS) until March 31, 2021.
4. An additional outlay of Rs 10,000 crore for PM Garib Kalyan Yojana.
5. A new job creation scheme that subsidizes firms who hire new employees. The subsidy covers retirement fund contributions by employees as well as employers for two years.