120 smallcaps deliver double-digit returns in a week. Is this the recovery everyone's looking for?
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More than 120 smallcap stocks delivered double-digit gains in the week gone by, marking one of the sharpest short-term rallies in the segment in recent months. The rally was broad-based, cutting across textiles, auto ancillaries, infrastructure, chemicals, consumer and capital goods. Stocks such as VTM, Gokaldas Exports, Garware Hi-Tech Films, Faze Three and United Foodbrands surged between 35% and 45% in just five trading sessions, while several others posted weekly gains in the 20% to 30% range. Even traditionally steady names in pipes, engineering, auto components and consumer discretionary joined the rally, signalling a sharp improvement in risk appetite. The move comes after months of relentless selling in small and midcaps, during which valuations corrected sharply despite earnings holding up in several pockets. Analysts estimate that over a third of the smallcap universe, representing nearly Rs 16 lakh crore in market capitalisatio...