D-Street Buzz: Mid, smallcap indices underperform benchmarks, fall 2% each

A day after slipping more than a percent, the Indian market remained in the negative territory on July 20 following an across-the-board selloff.

Flagship indices the Sensex and the Nifty declined about a percent but the second-rung mid and smallcaps suffered more pain as the BSE midcap and the smallcap indices fell 2 percent each.

At 1130 hours, the BSE Sensex was 443 points, or 0.84 percent, down at 52,110, while the Nifty was at 15,608, down 144 points or 0.91 percent.

The BSE midcap and smallcap indices were down 1.57 and 1.87 percent, respectively.

Out of the total 101 components in the BSE midcap index, 92 were in the red, while 634 of the 688 stocks were down in the smallcap index.

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Adani Green Energy, Adani Transmission, Crompton Greaves Consumer Electricals, Tata Consumer Products , Adani Enterprises and Cholamandalam Investment and Finance Company were among the top drags on the BSE midcap index.

Also read: Sensex, Nifty fall a percent each; mid, smallcap indices down 2%; 5 factors behind the selloff

Adani Total Gas, Dalmia Bharat, Trent, SRF and AAVAS Financiers were among the top drags on the smallcap index.

Almost all sectoral indices were in the red, with BSE realty, power, metal, industrials, telecom, utilities and capital goods, falling over 2 percent each.

Weak global cues, rich valuation of the market and concerns over rising COVID cases are weighing on market sentiment.

"Different reasons are attributed to this correction: the rising COVID cases in the US and the UK due to the delta variant, inflation concerns, and concerns about growth coming below consensus expectations. It may be all these. The fact is that at high valuations when investors are sitting on big profits, any fear can trigger profit booking and corrections," said VK Vijayakumar, Chief Investment Strategist at Geojit Financial Services.