Smallcap index falls nearly 2%, snaps 4-day gaining streak; midcap index declines 2% from day's high

Bear roar

The shares of small-cap companies recorded strong losses on March 10, pushing the Nifty Smallcap index down nearly 2 percent to trade at around 15,250. The sharp drop in the stock prices snapped the 4-day gaining streak seen by the small-cap index during the previous week when markets saw a relief rally from the incessant decline.

The Nifty Midcap index also stood in the red, dropping 2 percent from day's high to hover around 48,448. Notably, the decline in the broader markets marks a sharp fall from the morning trade, when the indices were trading flat with minor gains and losses.

360 One WAM was the top loser on the smallcap index, falling nearly 7 percent to trade at Rs 906 apiece. The stock has now recovered marginally after dropping over 8 percent in early trade at Rs 893, marking its steepest fall in three years. This came as capital market-focused stocks extended their decline.

The stock was followed by Apar Industries (down nearly 6 percent), Triveni Turbine (down nearly 6 percent), Titagarh Rail Systems (down over 5 percent), Birlasoft (down over 5 percent), Sterling and Wilson Renewable Energy (down nearly 5 percent), ITI (down nearly 4 percent) and others.

Few smallcap stocks, however, bucked the trend to trade with significant gains. Aavas Financiers shares were the top gainers among the pack, rising over 6 percent to trade at Rs 1,807 apiece.

Among the stocks on the Nifty Mid-cap index, Dixon Technologies was the top loser. The stock dropped nearly 5 percent to trade at Rs 13,275 per share. It was followed by Kalyan Jewellers (down nearly 5 percent), BSE (down nearly 4 percent), CG Power (down nearly 4 percent) and FACT (down over 4 percent).

Despite the downward trend, the mid-cap shares of Solar Industries, Policybazaar-parent PB Fintech, Torrent Power and Indus Towers were trading with significant gains of up to 4 percent.

"While large caps appear better placed, the broader market may consolidate unless earnings growth picks up. Strong inflows into small caps in recent years have elevated valuations, making them more vulnerable to corrections if earnings do not keep pace. With volatility still low and markets not yet at full capitulation, a measured approach remains prudent—staggered large-cap allocations, selective mid-cap exposure, and caution in small caps until earnings visibility improves. Market sentiment remains fragile, and further upside may require stronger fundamental support to sustain," said Capitalmind Research senior research analyst Krishna Appala.