Mid and small-cap indices hit new 52-week high on the back of low inflation and lower raw material prices triggered by a decline in crude oil prices. The Nifty Midcap100 index surged 0.71%, while the Nifty smallcap100 index rose 0.78%. Since April, the Nifty Midcap100 gained 12.5%, while Smallcap100 advanced 20%, attributed to better domestic macroeconomic outlook and improving profitability. However, valuations in most cases have gone to unrealistic levels, and consumption demand remains sluggish. According to Kotak Institutional Equities, BFSI stocks now offer a decent reward-risk balance on the CMP-FV equation.