The Sensex crossed 42,000 for the first time as it touched 42,059 in the morning trade on January 16. It took 36 sessions for the index to make the journey from 41,000 (first hit on November 26) to 42,000, but the big movers were the small & midcap stocks.
The Sensex added 1,000 points, rising 2.4 percent, but the BSE Midcap index rose 4.8 percent and the BSE Small-cap index rallied by more than 8 percent in the same period.
The rally can be attributed to positive global cues, reforms initiated by the government to combat falling growth and expectations of reforms from the Budget that will be presented on February 1.
Small & midcaps seem to be getting the maximum attention as most of the stocks in the broader market space have been giving double-digit returns from November 26, 2019.
The global investment bank Morgan Stanley said in a report the trend could well favour quality midcaps in 2020.
Morgan Stanley said it was backing three themes for 2020: a) domestic cyclical outperform defensives, b) value and growth stocks beat quality stocks, and c) mid-caps lead the largecaps.
Investor wealth soared by over Rs 6 lakh crore in a buoyant equity market. The market capitalisation of BSE-listed firms soared from Rs 153.70 lakh crore on November 26 to Rs 159.74 lakh crore on January 15, 2020.