While mid-cap and small-cap indices have fallen about 6% in the previous six trading sessions, about 23 stocks in the Midcap 150 index and 55 stocks in the Smallcap 250 index have fallen more than 10%.
On Thursday, the Nifty Midcap 150 index fell 1.14% and the Nifty Smallcap 250 dipped 0.48%, while the Sensex and Nifty tumbled 1.4% each.
Among midcaps, Indraprastha Gas fell 20.6% in the past six trading sessions. Bank of India, Bank of Maharashtra, Biocon, Tata Communications, FACT, Devyani International, and Syngene have dropped 12-15%.
Within the Small-cap 250 index, MMTC fell 37%. NMDC Steel, Sunteck Realty, BEML and Finolex Industries fell 16-21%.
Analysts said investors and traders are cutting their holdings in stocks that have run up the most in recent weeks.
“Due to the current correction, investors who have made money are still comfortable whereas there is some panic among short- term investors,” said Pankaj Pandey, head of research at ICICI Direct.Historically, during deep market corrections, large caps have dipped 12%, midcaps have fallen 17% while the smallcaps have dropped 20%, said Pandey.
“A correction was expected in the mid-cap and small-cap segments after they outperformed Nifty year-to-date. Now, investors are rushing to book profits because of the global concerns,” said Aamar Deo Singh, head-advisory, Angel One Broking.
Analysts said investors must watch out for the crucial support level of 14,000 for the Nifty Midcap150 and 11,500 for the Nifty Smallcap 250. The Midcap 150 index closed at 14,305 and the Smallcap 250 index closed at 11,797 on Thursday.
What should investors do?
The markets are expected to bounce back once the global concerns subside and good quality stocks in midcaps and smallcaps will see a recovery, said Ruchit Jain, lead research analyst at 5Paisa.com. “PSU stocks are a good segment for investors to look at, which have not witnessed large volumes being sold at lower levels,” said Jain.
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