Investors are flocking only to those counters that offer good valuations.
Mid-cap stocks, which were much in demand in the recent past, are still reeling from the impact of the correction witnessed last week.
About 70 per cent of the stocks from the BSE Mid-cap Index are yet to recover from the losses suffered during the correction. But buying interest in counters in the banking, pharma and construction sectors are back with a vengeance.
In the past week, several stocks have already witnessed a surge in prices with demand rising for stocks in these select sectors.
Among the major mid-cap stocks, the worst hit were Aftek Infosys, Shaw Wallace & Co and Spice Jet, all down by about 20 per cent within a span of two weeks, from September 19 to October 3.
Other major stocks in the sector that witnessed downsides were Indiabulls Financial Services - down 18 per cent from Rs 230 to Rs 188, Gujrat NRE Coke (down 17 per cent) and Reliance Capital (down 15 per cent).
However, analysts are not writing off the mid-caps yet.
According to Suresh Parmar, senior equity dealer, Darashaw, "the mid-cap sector has not lost all its sheen. There was a fair amount of profit booking in some good counters by retail investors as well as the domestic mutual funds. Though a bout of selling was witnessed in the last two weeks, renewed buying interest has sprung up in the last couple of days. Now the demand is highly stock specific as investors flock towards the stocks that have good valuations."
Of late, mid-cap stocks in the banking and pharma sectors have returned to focus.
Major bank scrips that went up include State Bank of Mysore (18 per cent), State Bank of Bikaner & Jaipur (12.3 per cent) and ING Vysya Bank (12 per cent).
Among the major pharma scrips that have appreciated during this period are Panacea Biotec (20 per cent), Glaxo Smithkline (10 per cent) and Pfizer (8 per cent).
"The demand has become sector specific after the correction in mid-caps. Demand for pharma companies have risen with Pfizer posting excellent results while the bank stocks are moving high as the sector is expecting better results in this quarter. The Infrastructure scrips are also highly in demand because of the increase in their order book position," V V L N Shastri of Firstcall India Equity Advisors said.
Other scrips that have made a major come back include Mahindra GESCO Developers, which went up 45 per cent from Rs 199.3 to Rs 288.9 per cent, Kalyani Steel (up 22 per cent), Engineers India (up 17 per cent), Hindustan Construction (up 15 per cent), BOC Ltd (up 13.3 per cent), Voltas (up 12 per cent) and TVS Motors (up 10 per cent).
The sentiments at the mid-cap IT counters seem to be negative. Mid-cap IT stocks like Financial Technologies (down 13.5 per cent), Geometric Software Solutions (down 13.5 per cent), Polaris Software Labs (down 8 per cent) and NIIT Technologies (down 6.2 per cent) and 3i Infotech suffered losses.
Other mid-cap stocks like Praj Industries (down 10.4 per cent), Amtek Auto (down 10 per cent), Gujarat Alkalies & Chemicals (down 10 per cent), Ruchi Soya Industries (down 9 per cent), Nagarjuna Fertilizers and Chemicals (down 9 per cent), Balaji Telefilms (down 8 per cent), Jindal Stainless (down 8 per cent), New Delhi Television (down 6.3 per cent) and Sterling Biotech (down 5 per cent), which had shot up during the rally have also plunged.
