Indian share markets continue to trade flat with a negative bias during the morning trade. Sectoral indices are trading on a mixed note with FMCG sector and capital goods sector leading the gains. Metal stocks and energy stocks witness the majority of the selling pressure.

The BSE Sensex is trading lower by 25 points and the NSE Nifty is trading lower by 9 points. The BSE Mid Cap index is trading up by 0.4% while the BSE Small Cap index is trading up by 0.6%. The rupee is trading at 64.43 to the US$.

Small caps have comfortably outperformed the Large caps and how.

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 automobile sector, as per a leading financial daily, Mahindra & Mahindra (M&M) has entered into a strategic partnership with Renesas, a supplier of advanced semiconductor solutions, under which the latter will become the official technology partner for its Formula E team while also working together on electric racing and road cars.

Through this partnership, both the companies will leverage their mutual strengths to expand the development and manufacturing of electric vehicles (EVs), powertrain, advanced driver assistance systems, and other systems in India and other emerging markets.

This will be in line with Mahindra’s ‘race to road’ story of the electric vehicle development that the Formula E platform delivers.