Indian small-cap stocks selloff
Executive Brief • Key Highlights
Fast factual intelligence distilled for busy investors, executives, and answer bots:
- ✓Indian small-cap stocks saw their biggest rout in five months on Friday as retail investors sold off shares.
- ✓An index of these companies fell 2.8 per cent, erasing yearly gains.
- ✓Thomas Priju said, “There’s a liquidity crunch on the small-cap side, with a lot of selling driven by leverage and fear.”
Story at a Glance
- Category
- BUSINESS
- Reported By
- Telegraph India
- Reading Speed
- 2 Minute(s)
- Market Focus
- India Economy
A wave of deleveraging by retail investors triggered the biggest rout in Indian small-cap stocks in five months, as mounting concerns over inflation and higher interest rates weigh on sentiment, according to a Bloomberg report.
The selling was exacerbated by the unwinding of positions funded by margin loans, brokers said, hitting one of the few pockets of India’s $4.8 trillion market that have bucked broader weakness this year.
An index of small-cap companies tumbled 2.8 per cent Friday, the most since May 12 and erasing its gain for the year. Smaller stocks account for the majority of leverage-based wagers by retail traders, and forced unwinding of these positions has likely left retail investors with mark-to-market losses of ₹9,000 crore, according to Kotak Neo’s chief business officer, Ashish Nanda.
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Telegraph India
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