Midcaps in sweet spot as valuations fall

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Key Points

Midcaps have been on a good run of late, with the BSE MidCap index hitting an all-time high last week..

Keeping up its strong run, the index on Friday hit a new lifetime high of 27,294.10, surpassing its previous high earlier in the week...

According to the one-year forward blended price/earnings (weighted average of current and next fiscal years estimate, based on the number of days left in the present year), valuations had peaked in January, with the average midcap valuation being 31.27 on January 18...

Indian markets are currently in a consolidation zone, given the strong outperformance to global peers last year, rising global headwinds, benign domestic demand environment and the uncertainty on monsoons given the El-Nino expectations..

Analysts say the fall in valuations has triggered an interest in midcaps, which is likely to continue for the next few months, thanks to the strong earnings season..

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