The BSE Smallcap index continues to struggle, extending its losing streak to a fourth straight session on February 27, even as Sensex and Nifty 50 remained relatively stable.
Contents
- As of 11:20 AM, the BSE Smallcap index was down 1.84%, while the BSE Midcap index was lower by 0.97%.
- February’s track record for smallcaps remains weak, with 12 out of the last 17 years delivering negative returns.
- This month, the BSE Smallcap index is on track for a sharp decline of -11.62%, marking a significant correction.
Key Losers & Gainers in Smallcap and Midcap Segments
Top Losing Stocks in BSE Smallcap Index
| Stock | Change (%) |
|---|---|
| RSystems | -6.98% |
| Inox Wind | -6.85% |
| Precam | -6.63% |
| EMBDL | -6.38% |
| JBMA | -6.36% |
Top Gaining Stocks in BSE Smallcap Index
| Stock | Change (%) |
|---|---|
| Sanghvi Movers | +5.40% |
| Sterling Tools | +5.37% |
| MPS Ltd | +4.47% |
Top Losers in BSE Midcap Index
| Stock | Change (%) |
|---|---|
| Suzlon Energy | -4.18% |
| Rail Vikas Nigam | -3.93% |
| Dixon Technologies | -3.20% |
Top Gainers in BSE Midcap Index
| Stock | Change (%) |
|---|---|
| AU Small Finance Bank | +6.08% |
| L&T Finance | +9.75% |
| Muthoot Finance | +3.52% |
| Aditya Birla Capital | +3.52% |
Why Are Smallcap and Midcap Stocks Underperforming?
1. Historical February Weakness
- Seasonality plays a role, with February historically being a weak month for smallcaps.
2. Global Market Concerns & Foreign Outflows
- Concerns about US President Donald Trump’s reciprocal tariffs are adding uncertainty.
- Weak global cues and continued foreign investor outflows are weighing on the market.
3. Valuation Concerns in Smallcaps & Midcaps
- Experts warn that midcap and smallcap stocks remain overvalued, despite the correction.
- Amish Shah, Head of India Research at Bank of America Securities, remains cautious about the space.
- Kotak Institutional Equities analysts predict that largecaps may remain rangebound, while some “narrative” smallcap stocks could face steeper corrections.
Outlook for Smallcap & Midcap Stocks
- With smallcap valuations stretched, further downside risks remain if market sentiment remains weak.
- Largecaps may offer relative stability, while selective smallcap & midcap stocks with strong fundamentals may still be attractive for long-term investors.
- Investors should remain cautious and focus on quality stocks instead of speculative trades.
