Smallcap shares are under heavy selling pressure in the last few months. Due to this, the Nifty Smallcap 100 and the Nifty Smallcap 250 index were caught in the recession last week on the National Stock Exchange. The fall of more than 20 per cent from their highest levels is considered in the grip of recession.
The Nifty Smallcap 100 touched the highest level of 19,716 on 12 December 2024 and since then it fell 23.7 per cent (4,672 points) to a low of 15,044 in the day trading on Monday. Meanwhile, the Nifty Smallcap 250 has fallen by more than 24 per cent from its supreme September 27, 2024 and touched a low of 14,145 on Monday.
During this period, about 60 percent of the Nifty Smallcap 250 shares recorded more loss than the BSE Smallcap 250. Analysts said the sharp decline in the last few months could bring the smallcap shares to a razing round as investors are going to cash withdrawn, saving their capital, reducing losses and safe hideouts.
According to the definition, the collapse is an incident in which investors sell their positions during prolonged decline in share prices for fear of huge losses. This nervous selling can also start with more margin in margin calls and futures and options. On the other hand, some people believe that the rash can eliminate sales pressure, which can give a new opportunity to purchase.
Senior Vice President (Research) Ajit Mishra in Railor’s Broking said that the fall of its highest level in the index of small stocks has been very strong, causing it to go into the recession. Meaning that I do not dismiss their re -return boom, but it should be short -lived. Small stocks still look weak and may fall further than midcap.
First Published – February 17, 2025 | 11:12 PM IST
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