Investor Confidence Grows As Micro, Small-Caps Lead Market Gains

The report noted that the broader market remained in positive territory throughout the month, with micro- and small-cap segments outperforming their larger counterparts

The defence sector emerged as the top performer, delivering an eye-catching 21.84 per cent monthly gain

Source : PTI

Indian equities experienced a strong performance in May, with the spotlight firmly on smaller companies. The Nifty Microcap 250 index surged 12.10 per cent, marking a standout performance for the month, while the Nifty Smallcap 250 index followed closely with a gain of 9.59 per cent, according to the latest Global Market Snapshot released by Motilal Oswal Asset Management Company on Saturday.

The report noted that the broader market remained in positive territory throughout the month, with micro- and small-cap segments outperforming their larger counterparts. Investor appetite for these high-risk, high-reward stocks appears to have held strong, underlining growing confidence in the domestic economic outlook.

Broader Indices Deliver Steady Gains

In addition to gains in micro and small-caps, the Nifty Midcap 150 rose by 6.30 per cent, while the Nifty Next 50 climbed 3.49 per cent. The benchmark Nifty 50 saw a more modest rise of 1.71 per cent, and the Nifty 500 index advanced 3.50 per cent, helped by robust performances in industrials, consumer discretionary, and financial services.

On an annual basis, the Nifty Microcap 250 rose 13.74 per cent, and the Nifty Smallcap 250 grew 7.72 per cent, further indicating sustained investor interest in lower-tier stocks.

Defence Leads Sectoral Surge

The defence sector emerged as the top performer, delivering an eye-catching 21.84 per cent monthly gain and 30.78 per cent growth over the past year. All major sectors ended May in the green except for FMCG and utilities, which slipped slightly by 0.09 per cent and 0.04 per cent, respectively.

Factor-Based Strategies Show Consistency

Investment strategies based on market factors also yielded solid returns. The momentum index rose 5.40 per cent, quality gained 4.82 per cent, enhanced value added 4.20 per cent, and low volatility advanced 1.39 per cent, showing resilience across varied market approaches.

Gold Retreats As Global Tensions Ease

On the commodities front, gold prices dipped by 0.74 per cent, largely attributed to reduced geopolitical uncertainty, particularly the easing of tensions between the United States and China, which dampened demand for gold as a safe-haven asset.

The report highlighted that investor sentiment remained upbeat, driven by sector-specific momentum, a resilient domestic economy, and supportive global trends. Analysts expect this broad-based market strength to continue in the near term, especially in segments tied to infrastructure, consumption, and manufacturing.