• Notification Date: 18-02-2025
• Notification No: N/A

Small-Cap & Micro-Cap Indices Plunge into Bear Market with Shocking Downfall

Since September 27, Indian micro-cap and small-cap stocks have plunged, technically placing the Microcap 250 and Nifty Smallcap 250 indices in a bear market. Both have declined more than 20%, with Smallcap down 21.4% and Microcap down 20.2%. The steep fall is in sync with the fall in the Nifty Midcap Index, which has fallen 17.7% over the same timeframe.

The recent market volatility caused abrupt losses in the majority of small-cap, micro-cap, and penny stocks, losing up to 30% to 80%. Foreign selling was a wave that served to propel one of the worst stock market declines since March 2020.

Aniruddha Sarkar, chief investment officer at Quest Investment Advisors, explained that the indexes only truly start to show the extent of the issue. Individual stocks have fallen even more recklessly than the indexes themselves.

Since September 27, more than 100 shares in these groups have fallen 10%-30%, of which 79 are from the Smallcap index and 80 are from the Microcap index that has fallen 30-50%. This on-going weakening of the market is a canary in the coal mine for anyone who likes smaller stocks.