Valuation anxiety grips smallcaps as 234 stocks sink in double-digits
BSE Midcap and Smallcap indices lost over 4% each.
The broader market had outperformed the benchmark indices over the past one year even as there were pockets of concern around the one way rally.
In what is a steep fall from the preceding week, only four smallcap stocks have delivered double-digit returns during the week. In contrast, around 16 smallcap stocks gained in double-digits in the previous week.
Hercules Hoists was the top gainer in the smallcap pack, offering a rare 15% rally amid chaos. It was followed by Astec Lifesciences and Cigniti Technologies, whose shares rose just over 12% in the week ended March 15.
In contrast, as many as 234 stocks sinked with double-digit losses with 14 of them losing over 20%. India Pesticides shed the most at nearly 40%, followed by Paisalo Digital and Gensol Engineering.
The midcap segment too felt the heat but the destruction was little underplayed as only two stocks — Solar Industries and Linde India — gained in double digits. Eleven stocks in the midcap universe lost in double-digits in the reporting period.
Overall, domestic markets had a muted week as even the reliable largecap stocks fell victim to cautious sentiments among investors. Benchmark Sensex declined nearly 2% during the week and 20 out of the 30 constituents settled with cuts.
Sebi chief Buch highlighted irrational run-ups and expensive valuations in small and midcaps and asked for a stress test disclosures for funds investing in the broader market.
What should investors do?
Analysts said
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