Mid-cap and small-cap indices felt the heat on Thursday as investors became jittery amid growing uncertainties owing to an escalation in the Israel-Iran conflict. The Nifty Midcap 100 and the Nifty Smallcap indices fell 1.8 per cent and 2.28 per cent, respectively, during the intraday trades.
How much did mid- and small-cap indices decline?
The Nifty Midcap 100 plunged 1.83 per cent, or 1,061.75 points to a low of 57,047.45 in the intraday trades. The Nifty Smallcap 100 tanked 2.28 per cent, or 419.9 points, to a low of 17,958.55 during intraday trades.
Both indices recovered mildly towards the end of the session, with the Nifty Midcap 100 settling 1.63 per cent lower and the Nifty Smallcap 100 down 1.99 per cent at market closing.
In comparison, the benchmark indices, Sensex and Nifty, ended almost flat. The BSE’s Sensex lost 0.1 per cent, or 82.79 points, to end at 81,361.87. The broader Nifty 50 declined 0.08 per cent, or 18.8 points, to finish at 24,793.25.
What led to the fall in mid- and small-cap stocks?
Market analysts said that risk-off sentiments in the market is triggered by the crisis in West Asia and its economic fallout. During a risk-off period investors would prefer safe assets. The resilience in gold is due to this safe haven buying.
“In stocks, large caps are relatively fairly valued when compared with the mid- and small-caps, which are excessively valued. These excessive valuations are due to the sustained flows into these segments. It appears that investors are shifting from the risky over-valued mid- and small-cap segments to the safety of large caps,” said VK Vijayakumar, chief investment strategist, Geojit Investments Ltd.
Whenever there is some kind of uncertainty in the market, retail investors tend to panic, which leads to heavy selling. This was evident in today’s trading session, said G Chokkalingam, founder and head of research, Equinomics.
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Which mid- and small-caps lost the most?
From the Nifty Midcap 100 index, the companies that registered highest losses included Indian Renewable Energy Development Agency Ltd ( 4.3 per cent), Supreme Industries (4.22 per cent), Adani Total Gas Ltd (4.14 per cent), Rail Vikas Nigam Ltd (4.11 per cent) and LIC Housing Finance (3.78 per cent).
Among the Nifty Smallcap constituents, firms that dropped the most included Brainbees Solutions (6.25 per cent), Inventurus Knowledge Solutions (5.54 per cent), Cyient Ltd (5.27 per cent) and Reliance Power Ltd (5 per cent).
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