Mid-cap and small-cap stocks show recent growth

Mid-cap and small-cap stocks have shown strong gains recently. They have increased by about 5% in the last three trading days, which is better than the benchmark Nifty 50's rise of 2.25%. Investors are hopeful that this upward trend may continue. They are looking for another 5% increase in the coming days. However, some are cautious due to the significant losses these stocks faced over the past six months. On Wednesday, the Nifty Midcap 150 rose by 2.37%, the Small-cap 250 gained 2%, and the Microcap 250 increased by 2.2%. Market sentiment has improved lately, influenced by a positive global outlook and a decrease in selling from foreign investors. A recent drop in the dollar index and increased buying from foreign institutional investors have contributed to this market pullback. Ruchit Jain, a vice president at Motilal Oswal Financial Services, noted that the market's overall condition has become positive, with small-cap and mid-cap indices closing above key technical levels. Before this bounce back, the mid-cap 150 index had dropped over 20% since September 27. The small-cap 250 index fell by 25.4%, and the micro-cap 250 index also saw a decline of 25%. Despite the short-term gains, some investors still question the sustainability of this recovery.