Inflation, rate hikes play market party poopers in FY23; smallcaps hit hard

The small-caps were hit on the chin with the S&P BSE Small-cap index slipping nearly 7 per cent thus far during in FY23, underperforming the S&P BSE Midcap and the BSE 500 indexes

The runaway rally in Indian equities seen in fiscals 2020-21 (FY21) and FY22 came to a grinding halt in FY23, as most global central banks, including the Reserve Bank of India (RBI), tightened their monetary policies in order to fight galloping inflation.

As a result, the S&P BSE Sensex and the Nifty50 are set to end the current fiscal with a loss of 1.6 per cent and 2.7 per cent. In FY21 and FY22, the S&P BSE Sensex had rallied 18.3 per cent and 68 per cent respectively, data shows.

The small-caps, meanwhile, were hit on the chin with the