Will midcap stocks outperform Nifty in April? What history hints at; stocks to watch

The Nifty Midcap index has seen strong seasonality in April over the past one decade, with the index delivering positive returns in eight of the 10 Aprils, data compiled by JM Financial suggested. If history is to go by, the index has good chances of beating the largecap benchmark Nifty this time.  

Out of the last 10 Aprils, the midcap index outperformed Nifty nine times, with the average outperformance of 1.4 per cent. The average return for the Nifty Midcap index for the decade stood at 3.7 per cent.

Nifty has, on the other hand, delivered 2.3 per cent average return in the last 10 Aprils. The index ended higher six times.

Among sector indices, Nifty Auto index saw the strongest seasonality, as it ended higher on eight occasions, with an average return of 4.5 per cent.  Nifty Bank, Nifty Metals, Nifty Energy, Nifty Pharma, Nifty CPSE delivered an average 3-6 per cent returns during the last 10 Aprils; these indices settled higher in seven occasions each.

The Nifty IT index has been the worst sectoral performance in Aprils. This index fell in eight of 10 occasions and saw an average underperformance of 2.8 per cent.        

Among F&O stocks, Indiamart Intermesh, GNFC, JSW Steel, Deepak Nitrite, Balkrishna Industries, Adani Enterprises, Divis Labs, Bajaj Finserv and Kotak Mahindra Bank closed in positive territory in nine or more times in the last 10 Aprils. The average returns for these stocks stood in excess of 5 per cent.

Alkem Laboratories and Infosys were two stocks that have seen negative seasonality and settled lower in seven or more occasions.