The day when the 30-share Sensex of the Bombay Stock Exchange (BSE) breached the psychological 21K level for a brief period and receded, the small- and mid cap stocks were badly battered. The BSE small-cap index lost 459.06 points, or 3.28%, to close the day at 13,516.13 points while the BSE mid-cap index ended the day at 9,817.07 points, losing 285.16 points, or 2.82%.
The market breadth of the two indices was squarely negative. Out of a total of 482 stocks in the small-cap space, 420 stocks declined in the range of 1% and 12.5% on Tuesday while only 60 stocks managed to gain ground.
In the mid-cap space, out of a total of 275 stocks, 241 stocks lost ground in the range of 1% and 8% while 34 stocks managed to rally higher.
Amitabh Chakraborty, president-equity, Religare ,Securities said, ?The small- and mid-cap counters went down because of profit-booking by investors ahead of the Reliance Power?s initial public offer (IPO) as these stocks have rallied too much in the recent past and investors were sitting on huge profits.?
During the last one month, the BSE small-cap index had surged higher by 19.17%, or 2,173.86 points, while the BSE mid-cap index rose by 8.81%, or 795.11 points, clearly outperforming the benchmark Sensex that could gain only 4.54% ,or 907.33 points.
According to the market experts, the small- and mid- cap counters witnessed a huge rally mainly on account of heavy buying by domestic investors, especially retail investors as the frontline stocks were looking quite expensive.