The government’s step to cut corporate tax rate in September 2019 rejoiced the market which was reeling under selling pressure till then.
Factors such as IL&FS-led NBFC crisis, rising NPA worries, economic slowdown, US-China trade concerns and high valuations had ruined the sentiment (since January 2018).
Nifty50 fell 0.34 percent, while Nifty Midcap index plunged 29 percent and Smallcap cracked 43 percent during the January 2018 to September 19, 2019 period.
On the other hand, Nifty50 gained 14 percent, Nifty Midcap gained 16.5 percent and Nifty Smallcap 100 was up 15 percent during the September 19, 2019-January, 20, 2020 period.
Favourable global cues (signing of US-China phase one trade deal, and strong hope of Brexit deal by January 31, 2020) and FIIs inflows also helped the small and midcap stocks recover.
Despite the up move, the broader indices are far from their record highs.
The Nifty Midcap 100 is 21.5 percent and Smallcap 100 index 54.6 percent away from their record high levels (21,840.85 and 9,656.55).
These stocks had fallen more than 50 percent during the January 15, 2018-September 19, 2019 period.