BSE Small-Cap, Mid-Cap Stocks Plunge Over 15% In 2019-20 So Far

The small cap and mid cap indices of the Bombay Stock Exchange have tumbled up to 15.42 percent in 2019-20 so far, taking bigger hit when compared to their blue-chip peers.

An analysis of the performance of the three indices shows that the S&P BSE Smallcap Index has dropped 2,317.4 points, or 15.42 percent, so far this fiscal while the Midcap Index has tanked 1,985 points, or 12.82 percent.

However, the fall in BSE Sensex was not as sharp. The 30-share benchmark index fell 1,527.46 points, or 3.94 percent, during the period in review.

The mid cap and small cap indices hit their 52-week lows of 12,914.63 and 11,950.86, respectively, on Aug. 23.

According to analysts, higher taxes on the super-rich and foreign portfolio investors, coupled with the ten-month-long auto slowdown, dented investor sentiments in the domestic equity market. Globally, concerns over of slow growth, the U.S.-China trade war and the likelihood of recession in the near future hurt sentiments, they added.

During times of uncertainty in the markets, small cap and mid cap stocks are more prone to heavy selling pressure.

According to analysts, smaller stocks are generally bought by domestic investors, whereas overseas investors mainly focus on frontline companies. The midcap index tracks companies with a market value that is on an average one-fifth of large firms, while smallcap firms are almost a tenth of that.