Small, midcap indices extend losses to 5th straight day mirroring benchmarks; Waaree Energies, Natco Pharma decline up to 6%

Nifty small, midcap indices see profit booking. 

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26 Aug, 2025 12:21

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The Nifty smallcap100 and midcap100 indices extended their losses for the fifth straight session on Friday, tracking weakness in the benchmark indices.

The Nifty midcap index has fallen up to 3.2 percent over the past five sessions, while the smallcap gauge has declined around 4 percent.

The broader trend mirrored the losses in the benchmark Sensex and Nifty, which have been on a downward run for six consecutive sessions. During this period, the Sensex has shed 2.73 percent, while the Nifty has slipped 2.52 percent.

Analysts believe the correction in the Nifty Smallcap, midcap indices may be driven by profit booking and the unwinding of certain long positions.

Ruchit Jain, Vice President, Motilal Oswal Financial Services, said "this downmove just seems to be a correction within an uptrend and hence, it could result in a good opportunity for positional traders and investors. However, from a swing trading perspective it could be a difficult phase and hence one should tighten the risk management on the positions and wait for some signs of reversal."

In the smallcap segment, pharma counters bore the brunt after the US announced a 100 percent tariff on imports of branded or patented drugs from October 1. Only 13 of the 100 stocks on the Nifty Smallcap 100 index were in positive territory. Neuland Laboratories and Natco Pharma fell up to 4 percent in intraday trade.

N ArunaGiri, Founder & CEO at TrustLine Holdings, added "While benchmark indices like the Nifty may not see a decisive breakout soon, selective opportunities continue to emerge in small- and mid-cap stocks. The recent weakness in these segments has opened up attractive entry points for patient investors who focus on quality businesses. This is not a market for chasing the index; it’s a market that rewards thoughtful, selective stock picking in the broader space. We believe that this phase presents a constructive environment for long-term investors, particularly those willing to take a bottom-up approach in identifying fundamentally strong companies in the broader small and mid-cap space."

Among midcaps, Waaree Energies was the top loser, declining up to 6 percent after US customs officials said that they were investigating the Indian company over suspected tariff evasion.

Other prominent laggards included Premier Energies, Vodafone Idea, Biocon, Kalyan Jewellers India and Hindustan Zinc, which dropped up to 3 percent.