After two years of underperformance, 2020 seems to be good for the broader markets — at least what it looks like so far — with the Nifty Midcap index positive for seven out of the nine trading sessions so far.

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The Nifty Midcap 100 and Nifty Smallcap 100 have outperformed the benchmarks, gaining 1.6 percent and 3.8 percent, respectively. In comparison, the Nifty has only risen 0.7 percent in the 2020 trading so far.

65 stocks from the Nifty Midcap 100 index have given positive returns in 2020 so far, while 35 have been in the red. Stocks like SPARC, Alken Labs, Quess Corp, Varroc Engineering, GMR Infra, HUDCO, Future Consumer, PNB Housing, Aditya Birla Capital, and Ramco Cement have given double-digit returns in 9 sessions, rising between 10 percent and 18 percent.

Losers include Reliance Power, Reliance Capital, Indiabulls Ventures, Pfizer, MGL, and Dish TV.

2019 witnessed a lot of polarisation with only major largecap contributing to index gains, however, investors are now moving beyond the top 50 stocks.

As per analysts, 2020 could well be the year of mid and small caps as the economy is showing signs of improvement.

The last quarter of 2019 also witnessed some recovery in the broader markets. While the midcaps underperformed in December 2019, they gained more than the benchmarks in the months of October and November.

READ MORE: 2020 Outlook: Reliance Securities lists top picks, says quality midcaps set for comeback

The decline started after the IL&FS crisis, which triggered a massive sell-off in the market and led to investors moving funds away from the broader markets to safe largecap stocks.

After almost 18 months of being shadowed by the crisis, the midcaps have started showing some signs of recovery. According to Reliance Securities, quality midcaps will see more investment as the value will be the focus in large caps.

According to JM Financial, the drivers for the current midcap rally are momentum on domestic flows and earnings outlook. The brokerage retains its bias towards largecaps in the medium-term though certain stocks in mid/small cap look attractive.