The BSE small- and mid-cap indices have underperformed the blue-chip companies in the year so far by witnessing an over 19% fall as compared to the broader market benchmark Sensex.
According to a study of the indices from December 31, 2010 to February 28, 2011, the small-cap index has shed 19.16% to finally settle at 7,817.32.
Similarly, the mid-cap index has saw an erosion of 18.32% during the period to close at 6,373.23 in the last day of trade in the previous month.
Meanwhile, the broader market key index Sensex has fallen by 13.09% during the period under review to settle at 17,823.40 as on February 28.
During the review period, the mid-cap index witnessed its lowest closing level of 6,292.18 on February 10, 2011, while the small-cap index reported its poorest close of 7,585.65 on the same day.
Mid- and small-cap stocks are vulnerable to any movement in the stock market, so any good or bad news may see sharp reactions from them, an expert said.
According to market players, everything was going good in the mid- and small-cap stocks but reports of stock price manipulations late last year in few companies, alongwith a string of negative news, including rising inflation, 2G controversy and surging crude oil prices globally, has badly jolted the confidence of small investors.
They also added buying sentiments have been weak and there is an uncertainty when both these sectors will make a comeback in the near future.
The mid- and small-cap indices track the performance of companies with market capitalisations that are a fifth or a tenth of that of blue-chip firms.