Midcap rally hits record high amid retail buying surge

Mumbai: Nifty midcap indices made fresh all-time highs Thursday, putting the spotlight back on the market's traditionally favourite high-growth segment that's now being driven by strong earnings, consistent monthly retail commitments, and some bargain buying. Still, the pace of the current rally has prompted veteran fund managers to offer the customary cautionary advice: Odds on a breather now are rather short.

Foreign Selling in Large-caps
The Nifty Midcap 100 index ended at 62,003.15 Thursday, up 1.1%. It had made an intraday high of 62,094.40. The Nifty 50 ended flat at 24,326.65 levels.


From the announcement of the ceasefire in the US-Iran conflict a month ago, the Midcap 100 index is up 13.6%, and the Nifty Smallcap 250 has gained 16.8%, outperforming the Nifty and Sensex, which have advanced 5.2% and 4.3%, respectively.

"We have seen relatively stronger earnings from select mid and smallcap pockets, particularly in financials and consumer-driven sectors, which has supported outperformance in the segment," said Ramesh Mantri, chief investment officer at WhiteOak Capital AMC.

Local investors have taken to stocks beyond the frontliners.

"While large-caps continue to face pressure from sustained FII selling, resilient domestic mutual fund inflows, especially into midcap, smallcap, multicap and flexicap schemes, have helped cushion the broader segment from sharper declines," Mantri said.

Foreign investors have offloaded shares worth a record ₹2.14 lakh crore in 2026.

"Midcaps had turned oversold during the peak of the geopolitical conflict despite an estimated 15% earnings growth outlook for FY27, which led to renewed buying interest in the segment," said Manish Bhandari, chief executive and portfolio manager, Vallum Capital.

He said that even in the past, periods of sharp crude price spikes or about 10-12% rupee depreciation have generally been followed by positive one-year forward returns.

On the technical charts, midcaps are showing strength after many months of consolidations.

Nilesh Jain, head of technical and derivatives research, Centrum Finverse said the midcap indices have delivered a multi-year breakout after nearly 18 months of consolidation following the September 2024 market peak.

"Since the start of the year, the Midcap 100 index had been testing previous highs and has now decisively moved above them," he said. Technically, the index is trading above all key short and long term moving averages, indicating a positive trend. In the near term, the index could move towards 62,800-63,500."