India’s Nifty Smallcap 100 index saw a significant decline of nearly 4 per cent on January 27, 2025, pushing its monthly losses to over 12 per cent – marking the worst drop since the Covid-19 market crash in March 2020. All stocks in the index recorded losses of up to 5 per cent in morning trade, with no gainers in sight.
This downturn marks the first double-digit monthly decrease since February 2022 and extends the index’s losing streak to three consecutive weeks. The broader market indices have been particularly affected by foreign investor selling pressure and worsening market sentiment.
Analysts point to several factors contributing to this sharp correction, including disappointing corporate earnings, reduced consumer spending, and a weak currency. Historical data shows that January has typically been a weak month for the index, with negative returns observed in 57 per cent of cases over the past 14 years.
Despite the current challenges, the index has a history of resilience. Following the crash in March 2020, it bounced back to end the year with gains of over 21 per cent. In fact, the Nifty Smallcap index has delivered double-digit positive returns in four out of the last five years, with 2022 being the only exception.
The ongoing weekly decline is the longest since late October as foreign selling pressure continues to weigh on mid and small-cap stocks.
Also read: Stock Market Live Updates 27 January 2025: Sensex plunges 824.29 points to close at 75,366.17; Nifty declines 263.05 points to settle at 22,829.15
Published on January 27, 2025
