Small and midcap stocks have shown a strong recovery, with the Nifty Smallcap 100 index closing at 17,309, reflecting a nearly 15% increase from its recent low of 15,099 recorded on February 23. The Nifty Midcap 100 index also experienced a rise of about 12%. This rebound has brought both indices back to levels prior to the US-Iran conflict, which had previously shaken investor confidence and led to significant sell-offs in the market. In contrast, the benchmark Nifty 50 index remains approximately 4% below its pre-war levels. Analysts attribute the rapid recovery of small and midcap stocks to their relatively attractive valuations and the sharper corrections they experienced earlier. Chokkalingam G, founder of Equinomics, emphasized that smallcaps are expected to outperform larger indices in the current year, suggesting that investors with moderate risk tolerance should consider allocating at least 50% of their portfolios to quality small and midcap stocks that are attractively valued and have strong balance sheets.