{"id":4408,"date":"2025-02-28T07:42:36","date_gmt":"2025-02-28T07:42:36","guid":{"rendered":"https:\/\/trending.niftytrader.in\/?p=4408"},"modified":"2025-03-04T16:26:28","modified_gmt":"2025-03-04T10:56:28","slug":"smallcap-midcap-indices-plunge-over-2-as-market-selloff-deepens","status":"publish","type":"post","link":"https:\/\/www.niftytrader.in\/markets\/smallcap-midcap-indices-plunge-over-2-as-market-selloff-deepens\/","title":{"rendered":"Smallcap, Midcap Indices Plunge Over 2% as Market Selloff Deepens"},"content":{"rendered":"<h2 data-start=\"75\" data-end=\"157\">Market Turmoil Continues: \u20b918 Lakh Crore Wiped Out Since Correction Began<\/h2>\n<p data-start=\"159\" data-end=\"441\">The Indian stock market witnessed another sharp decline on February 28, with smallcap and midcap indices tumbling over 2% in early trade. The sustained selloff, driven by geopolitical concerns and valuation worries, has now pushed both indices into bear territory.<\/p>\n<ul data-start=\"443\" data-end=\"880\">\n<li data-start=\"443\" data-end=\"568\">Nifty Smallcap 100 has declined over 21% from its peak, wiping out \u20b95.25 lakh crore in market capitalization.<\/li>\n<li data-start=\"569\" data-end=\"680\">Nifty Midcap 100 has plunged 24.5%, leading to an erosion of \u20b913.35 lakh crore in market value.<\/li>\n<li data-start=\"681\" data-end=\"773\">The broader market downturn has resulted in an \u20b918.60 lakh crore wealth erosion.<\/li>\n<li data-start=\"774\" data-end=\"880\">Nifty 50 has declined 15% from its all-time high, losing \u20b931.94 lakh crore in investor wealth.<\/li>\n<\/ul>\n<h2 data-start=\"882\" data-end=\"951\">Midcaps, Smallcaps Enter Bear Market Amid Valuation Concerns<\/h2>\n<p data-start=\"953\" data-end=\"1253\">The sustained downturn in midcap and smallcap stocks has been attributed to concerns over overvaluation and retail-driven speculation. Since their peaks in September 2024, these indices have witnessed an extended correction, marking one of the steepest declines in recent years.<\/p>\n<p data-start=\"1255\" data-end=\"1521\">As of 11:30 AM on February 28, Nifty 50 was trading 1.19% lower at 22,250, extending its losing streak to seven consecutive sessions. This also marks the longest downward trend in nearly 30 years, shaking investor confidence across broader markets.<\/p>\n<blockquote data-start=\"1523\" data-end=\"1716\">\n<p data-start=\"1525\" data-end=\"1716\">&#8220;The correction is easing Nifty 50\u2019s valuation closer to its 10-year mean of 20x one-year forward price-to-earnings (P\/E) ratio, approaching -1 standard deviation (SD),&#8221; analysts noted.<\/p>\n<\/blockquote>\n<h2 data-start=\"1718\" data-end=\"1786\">Market Veterans Warned of Overheated Smallcap, Midcap Rally<\/h2>\n<p data-start=\"1788\" data-end=\"1963\">The recent crash aligns with warnings from seasoned investors and regulators, who had cautioned against unsustainable valuations in smallcap and midcap segments.<\/p>\n<ul data-start=\"1965\" data-end=\"2573\">\n<li data-start=\"1965\" data-end=\"2102\">S. Naren, CIO at ICICI Prudential AMC, had repeatedly warned investors about potential overvaluation risks in these segments.<\/li>\n<li data-start=\"2103\" data-end=\"2253\">SEBI Chairperson Madhabi Buch had urged mutual fund houses in 2023 to impose stricter checks and balances to prevent a speculative bubble.<\/li>\n<li data-start=\"2254\" data-end=\"2417\">Prashant Jain, CIO at 3P Investment Managers, described the midcap underperformance as &#8220;unsurprising&#8221;, citing the lack of room for multiple re-ratings.<\/li>\n<li data-start=\"2418\" data-end=\"2573\">Sanjeev Prasad, MD at Kotak Institutional Equities, criticized the &#8220;midcap madness&#8221;, warning about excessive speculation in the broader market.<\/li>\n<\/ul>\n<h2 data-start=\"2575\" data-end=\"2639\">Retail Frenzy Fuels Volatility in Smallcaps and Midcaps<\/h2>\n<p data-start=\"2641\" data-end=\"2778\">Despite warnings, retail investors continued to pour money into smallcap and midcap mutual funds, further inflating valuations.<\/p>\n<blockquote data-start=\"2780\" data-end=\"3046\">\n<p data-start=\"2782\" data-end=\"3046\">&#8220;During a bull run, midcaps and smallcaps may outperform the broader market by 6-8% annually over two to three years. However, when corrections happen, they are often sharper than expected,&#8221; noted Sameer Arora, Founder and Fund Manager at Helios Capital.<\/p>\n<\/blockquote>\n<p data-start=\"3048\" data-end=\"3216\">Data suggests that while the past three years saw strong returns, historical trends indicate that over a longer horizon (7+ years), average returns stabilize:<\/p>\n<ul data-start=\"3217\" data-end=\"3297\">\n<li data-start=\"3217\" data-end=\"3256\">Nifty 50: 13-14% annual returns<\/li>\n<li data-start=\"3257\" data-end=\"3297\">Nifty 500: 15-16% annual returns<\/li>\n<\/ul>\n<h2 data-start=\"3299\" data-end=\"3351\">What\u2019s Next for Smallcap and Midcap Stocks?<\/h2>\n<p data-start=\"3353\" data-end=\"3584\">With market sentiment weakening, analysts expect further downside unless valuations stabilize. The recent correction could set the stage for healthier long-term growth, bringing stock prices closer to intrinsic value.<\/p>\n<blockquote data-start=\"3586\" data-end=\"3721\">\n<p data-start=\"3588\" data-end=\"3721\">&#8220;When markets cool off, end-users and institutional investors return, strengthening long-term fundamentals,&#8221; analysts observed.<\/p>\n<\/blockquote>\n<h3 data-start=\"3723\" data-end=\"3761\">Key Takeaways for Investors:<\/h3>\n<ol data-start=\"3762\" data-end=\"4310\">\n<li data-start=\"3762\" data-end=\"3886\">Midcap and Smallcap indices have officially entered bear market territory, falling 21% and 24.5%, respectively.<\/li>\n<li data-start=\"3887\" data-end=\"3984\">Nifty 50 has lost 15% from its peak, marking its longest losing streak in three decades.<\/li>\n<li data-start=\"3985\" data-end=\"4070\">\u20b918.6 lakh crore wiped out from broader markets, sparking investor concerns.<\/li>\n<li data-start=\"4071\" data-end=\"4184\">SEBI and market veterans had warned about speculative excesses in smallcap and midcap stocks since 2023.<\/li>\n<li data-start=\"4185\" data-end=\"4310\">Corrections could continue as market valuations readjust, providing better long-term entry points for investors.<\/li>\n<\/ol>\n<p data-start=\"4312\" data-end=\"4472\" data-is-last-node=\"\" data-is-only-node=\"\">As uncertainty looms, market participants will closely monitor global and domestic cues, waiting for signs of stabilization before making fresh investments.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Market Turmoil Continues: \u20b918 Lakh Crore Wiped Out Since Correction Began The Indian stock market witnessed another sharp decline on February 28, with smallcap and midcap indices tumbling over 2% in early trade. The sustained selloff, driven by geopolitical concerns and valuation worries, has now pushed both indices into bear territory. Nifty Smallcap 100 has [&hellip;]<\/p>\n","protected":false},"author":4,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[615],"tags":[],"ppma_author":[1331],"class_list":{"0":"post-4408","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-stock-market-news"}," _eael_post_view_count":0,"authors":[{"term_id":1331,"user_id":4,"is_guest":0,"slug":"sourabh","display_name":"Sourabh Sharma","avatar_url":{"url":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png","url2x":"https:\/\/trending.niftytrader.in\/wp-content\/uploads\/2025\/11\/Sourabh-Sharma.png"},"0":null,"1":"","2":"","3":"","4":"","5":"","6":"","7":""}],"_links":{"self":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/4408","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/comments?post=4408"}],"version-history":[{"count":3,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/4408\/revisions"}],"predecessor-version":[{"id":4684,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/posts\/4408\/revisions\/4684"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media\/4262"}],"wp:attachment":[{"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/media?parent=4408"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/categories?post=4408"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/tags?post=4408"},{"taxonomy":"author","embeddable":true,"href":"https:\/\/www.niftytrader.in\/markets\/wp-json\/wp\/v2\/ppma_author?post=4408"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}