Mid, smallcaps extend losing run for 3rd week, more downside seen
smallcap indices extended their losing streak to the third straight week as the risk-off sentiment paced by unrelenting foreign-fund selling has dampened investor appetite for these stocks.
Nifty's Midcap 150 index fell 1.7% on Friday, the Smallcap 250 index dropped 2.15% and the Nifty 50 fell 0.5% at close. The declines took the total losses in both midcap and smallcap indices so far in 2025 to 6.8% and 9.9%, respectively. The Nifty 50 is down 2.3% in the period.
Analysts said investor mood has soured as earnings slowdown is prompting them to cut exposure to these stocks, whose valuations are considered pricey
«We can attribute the recent fall to panic selling by investors as we have seen those mid and smallcap stocks, which have higher retail than institutional holding, fall more,» said Nikhil Rungta, co-chief investment officer of equity at LIC Mutual Fund. «While a notable portion of Smallcap 250 stocks remains overvalued, the froth in midcap index has mostly come off.»
The Nifty Midcap 150 had gained 23.8% and the Smallcap 250 rose 26.4% in 2024, compared to the 8.8% gains in the Nifty 50 last year.
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