Share Market Crash / Not only big but small shares also caused huge losses, will the situation change?

Share Market Crash: The stock market boomed after Covid, and small and midcap stocks gave tremendous returns to investors. But now, when the market is struggling, these same stocks are causing huge losses for investors. In February 2024, the market saw the biggest decline in 28 years, increasing panic among investors.

Reasons behind the decline

After March 2020, the biggest decline in small and midcap stocks was recorded in February 2024. The BSE Smallcap index fell 14% and the Nifty Midcap 100 index fell 10.8%. The main reason behind this is panic selling and volatility in global markets.

What does the data say?

Out of 938 stocks of the BSE Smallcap index, 321 stocks fell more than 20%.

The Nifty Midcap 100 index reached its new low.

Global uncertainty and lack of liquidity increased the pressure on the market.

What next?

According to experts, small and midcap stocks often face more volatility. Pratik Gupta of Kotak Institutional Equities says that overvaluation is often seen in this segment, which increases the possibility of correction.

According to Dharmesh Shah of ICICI Direct, historically the correction in the small and midcap segment has been up to 25-30%, after which the market recovers. He believes that the market is close to its bottom and investors should hold good quality stocks instead of panicking.

Strategy for investors

• Do not sell in panic: Market decline is a normal process, it is important to be patient.
• Choose quality stocks: Invest in companies with strong fundamentals.
• Take a long-term view: Historically the market emerges after correction, so continue investing.
• Experts believe that the market may recover in the next 3 months, but caution is necessary.

Disclaimer: Investing in the stock market is subject to risk. In such a situation, you must consult with your financial advisor before investing.