After opening the trading day in the red, share markets in India continue to trade below the dotted line in the morning trade amid weak Asian markets. Realty sector and capital goods sector are trading on a positive note, with stocks in the metal sector and stocks in the oil & gas sector witnessing maximum selling activity.

The BSE Sensex is down by 75 points and the NSE Nifty is trading down by 31 points. Meanwhile, the BSE Mid Cap index is trading up by 0.2%, while the BSE Small Cap index is trading up by 0.5%. The rupee is trading at 64.73 to the US$.

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.

In news from pharma sector, as per an article in The Hindu Business Line, Aurobindo Pharma is looking at inorganic growth opportunities in Eastern Europe and other geographies for deeper market penetration and to secure newer technologies.

Apart from acquisitions, the company is also keen to expand its product portfolio in the US and Western European markets with high-value drugs. The high-value products that are in the pipeline include oncology, hormones, depot injections, peptides, inhalers, patches and films, vaccines and biosimilars.

Also as per the reports, the company expects its US injectables business to grow at least 40% this financial year thanks to new launches and higher sales from existing products-growth that is likely to help offset some of the pricing pressure in oral solid drugs.