Midcap stocks gained strong traction in recent weeks, buoyed by improving liquidity and renewed investor interest ahead of the Diwali festival season. Analysts said the rotation from large caps to midcaps could trigger a near-term breakout, supported by steady earnings and robust domestic inflows. Sectors such as consumer discretionary, industrials, and financials are emerging as key beneficiaries, with improving demand visibility and capex-led growth underpinning optimism across India’s broader equity market.