Indian share markets witnessed selling pressure in the afternoon session and finished in red for second consecutive session. At the closing bell, the BSE Sensex closed lower by 152 points and the NSE Nifty finished down by 47 points. The S&P BSE Mid Cap finished down by 0.8% while S&P BSE Small Cap finished down by 0.5%. Losses were largely seen in metal stocks, energy stocks and PSU stocks.

Small caps have comfortably outperformed the Large caps and how. The BSE Small Cap Index has returned 21.7% in FY18 compared to 12.5% by BSE 100 and 11.7% by the Sensex.

Small Caps – Outperformers in Current Financial Year

Expectedly, valuations of certain Small cap companies have gone through the roof. It is important to understand the highly volatile nature of these stocks. In a downturn, these stocks tend to move in the opposite direction much faster as well.

While there, undoubtedly, lies hidden opportunities in the small cap space, it is important to focus on fundamentals of these stocks. Next, assess if they have the potential to move on to the ‘Safe stock’ category in the future.

Asian stock markets finished mixed as of the most recent closing prices. The Shanghai Composite gained 0.06%, while the Hang Seng & the Nikkei 225 fell 0.30% and 0.10% respectively. European markets are mixed to lower. Shares in France are off as the CAC 40 drops 0.07%. The FTSE 100 is down 0.02% while the DAX in Germany is unchanged.

Rupee was trading at Rs 65.06 against the US$ in the afternoon session. Oil prices were trading at US$ 57.09 at the time of writing.

Axis Bank share price gained 3.4% on the reports that the bank was looking to raise as much as US$ 1 billion from a group of investors after an increase in bad loans.

Cipla share price surged 2.1% after the company reported a 17.7% year-on-year increase in consolidated net profit to Rs 4.35 billion in the September quarter, beating market expectations.