Smallcap and midcap indices saw their biggest fall in 2024 as both segments slumped by nearly 5 percent on March 13, continuing their declining streak for the third session.
Of the 100 midcap stocks 94 were trading in the red in the afternoon, while 99 stocks of the 100 smallcaps declined in the afternoon trade.
In a conversation with CNBC TV-18, Nilesh Shah, managing director of Kotak Mutual Fund said that stress tests are not the cause of the market correction and that this correction is an unwinding of the excesses. Shah said that in terms of returns, 2023 was phenomenal for the market.
Also Read | Small-cap Stress: 82% of stocks in the small-cap index fall in the past three weeks
In the broader market, largecap indices will not correct as much as the microcap indices, Shah said. He was of the view that a lot more correction could occur in microcaps and SME stocks.
Shah also said that Kotak Mutual Fund will never buy SME stocks given their low liquidity and unpredictable governance standards.
Rohit Srivastava, founder and strategist of Indiachart.com told CNBC-TV18 that if Nifty 50 closes below 22,100, it means that the current topping process is complete and we are now in the stage called 'free-fall', meaning 'buy the dip' and still getting a cut.
At 3.22pm, Nifty 50 was down 1.6 percent at 21,980 and Sensex was down 1.3 percent at 72,706.
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