MUMBAI: The market may have been reeling under pressure of negative global cues and fears of tightening of monetary measures in India. But, investors do not seem to be in a mood to give up. They have been buying selectively in front-running stocks, particularly those which underperformed the market in last year’s bull run that otherwise saw a significant improvement in valuations across the board. Many other small and mid-cap shares also defied the downtrend to emerge gainers in the current market.

A good amount of defensive buying has helped shares of a few leading FMCG, telecom and pharma companies to buck the downtrend in the past two weeks. Prominent among the front-running outperformers are ITC, Nestle India, Idea Cellular and Cadila Healthcare. Investors have been seen flocking to these counters to take advantage of cheaper valuations.

Better quarterly earnings could have also provided trigger for momentum in a few of the stocks, according to analysts.

“In a weak market, investors tend to buy defensive stocks as part of churning of their portfolios. They sell high-value, high-risk stocks with low-earnings visibility and buy relatively cheaper shares of the companies with good potential for growth,” said Maulik Patel, head of research, KR Choksey Shares and Securities.

Investors could be buying in shares of above mentioned companies on expectations of good returns in the form of dividends, he added.

Karvy Stock Broking vice president Ambareesh Baliga believes the firm trend in the select stocks could be due to lack of much selling and not because of major buying interest in the counters. “The near-term outlook does not appear positive for sectors like FMCG because of a decrease in rural household spending amid rising food inflation. In such a scenario, the momentum in the shares may not last for long,” he said.

Out of the 200-odd A-group stocks listed on the Bombay Stock Exchange (BSE), 14 have outperformed the Sensex to record gains between January 18 and 28, the period which saw the market decline continuously except on Thursday. FMCG majors Nestle and ITC rose 1.6% and 1.4% respective while telecom player Idea Cellular gained nearly 1% during the period.

The list of the gainers also includes two banks — Bank of Baroda and Indian Bank — which gained 1.8% and 1.7% respectively. Jai Corp, Hind Copper, Koutons Retail, Sun TV, Crompton Greaves, RCF, Titan Inds and Pantaloon Retail are among the other gainers in the BSE’s specified list.

Many small and mid-cap shares also recorded gains despite the general downtrend in the broader market. Brokers, however, do not see any justification behind the rally in most of them, particularly shares of lesser known companies.

They fear operator-driven activity could be driving the prices and so retail investors should be cautious while dealing in them. In BSE’s B Group, which mostly comprises SME stocks, some 100-odd stocks recorded gains between 1% and as high as 50% between January 18 and January 28.