At the bourses, meanwhile, Nifty India Manufacturing index, which has outperformed the market by surging 26 per cent in the past nine months
Analysts credit this underperformance to retail and high networth investors shifting attention towards initial public offerings (IPOs) and lingering valuation concerns in smallcaps
In the past month, the Smallcap index gained 3 per cent, as against a 1.5 per cent rise in Midcap and a 0.66 up move in Sensex
Time to buy these 5 smallcap stocks? JK Tyre, Timken India, Triveni Turbine, Can Fin Homes and Rainbow Children can potentially rally up to 27% from here, suggest technical charts.
The Sensex closed at 75,736, down 203 points (0.3 per cent), while the Nifty ended at 22,913, slipping 20 points (0.09 per cent). Both indices hit their lowest levels since January 27
The NSE Nifty Smallcap 250 Index was on course to enter a bear market after losing about 3.5 per cent early in Tuesday's session after a similar drop the previous day
Market experts are cautious about the outlook of small-cap stocks going forward
Stock Market Highlights on May 28, 2024: The losses were steeper in the broader markets where the BSE MidCap fell 0.63 per cent, and the BSE SmallCap slipped 1.09 per cent
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While the overall stock market went up, large companies significantly outperformed small companies between December 2023 and March 2024
A eight-day rally has put the Nifty Smallcap 250 Index on course for reclaiming the Feb. 27 level when the securities regulator flagged the risk of a potential bubble in the smaller companies
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Bulls say the blowout returns in smaller companies stem from robust corporate profit growth in recent years
Sebi will review its rule that mandates small- and mid-cap funds to invest at least 65% of their assets in such stocks if fund managers find it is "restraining risk management
Heavy inflows have sent the Nifty small cap 250 index surging 71% over the past 52 weeks and lifted the Nifty mid cap 100 index 64%. That far exceeds the benchmark Nifty's 28% rise
However, the recent correction in stock prices may not be the end of the downward trend for mid and small-cap stocks,
The fund is benchmarked against S&P BSE 250 Small Cap Total Return Index (TRI)
Nearly two-thirds of them have underperformed the small-cap index so far this year
The Nifty 50 index settled 0.25% higher at 19,444, while the S&P BSE Sensex gained 0.33% to 65,433.30