The gauge of shares in the broader market - BSE smallcap index - continued to show declining momentum for a fourth consecutive trading session on February 27, even as leading benchmarks Sensex and Nifty 50 were relatively flat on the final day of the February series. However, for the series, the leading indices are poised to register negative returns for a fifth month in a row.
The BSE Smallcap index was trading 1.84 percent lower as of 11:20 am, meanwhile, BSE Midcap is down by 0.97 percent in trade.
The month of February has traditionally been one that has seen underperformance by the smallcap index, with 12 out of last 17 years giving negative returns. This February, the BSE Smallcap index is poised to deliver a return of -11.62 percent.
As of 12 noon, stocks dragging down the BSE Smallcap index today include RSystems (-6.98%), Inox Wind (-6.85%), Precam (-6.63%), EMBDL (-6.38%), and JBMA (-6.36%). On the other hand, Sanghvi Movers (+5.40%), Sterling Tools (+5.37%), and MPS Ltd (+4.47%) are posting strong gains.
Stocks weighing on BSE Midcap index include Suzlon Energy (-4.18%), Rail Vikas (-3.93%), and Dixon Technologies (-3.20%), while gainers include AU Small Finance Bank (+6.08%), L&T Finance (+9.75%), Muthoot Finance (+3.52%), and Aditya Birla Capital.
A combination of factors including potential disruption from US President Trump’s reciprocal tariffs, ongoing foreign outflows and weak global setup may be behind the underperformance.
This downward momentum also aligns with experts' warning on stretched valuations in the mid and smallcap segments.
Amish Shah, Head of India Research at Bank of America Securities continues to be wary of the space, arguing that mid and smallcap stocks are still overvalued despite recent correction.
Another analyst from Kotak Institutional Equities said it is possible for largecaps to remain rangebound, while several ‘narrative’ stocks in the mid and smallcap space - stocks whose value is based on a narrative, rather than on its fundamentals - may see a sharper correction.
Disclaimer: The views and investment tips expressed by experts on Moneycontrol are their own and not those of the website or its management. Moneycontrol advises users to check with certified experts before taking any investment decisions.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
Find the best of Al News in one place, specially curated for you every weekend.
Stay on top of the latest tech trends and biggest startup news.
