Fund managers advise conservative investors to cap midcap exposure at 10 to 15 per cent of their equity portfolio.
Despite trailing the benchmark Nifty 50, small and midcap (SMID) stocks appear pricey on a 12-month forward price-to-earnings (P/E) basis. The Nifty trades at roughly 21x forward earnings, compared with around 28x for both the Nifty Smallcap 100 and Nifty Midcap 100 indices.
'Stopping now would defeat the core purpose of an SIP, which is to average out the purchase cost over market cycles.'
Ask rediffGURU and PF expert Nitin Narkhede your mutual fund and personal finance-related questions.
The BSE Sensex and the Nifty 50 declined around 4.5 per cent each since the start of the West Asia conflict.
Indian equity investors experienced a significant loss of 16.32 lakh crore due to a two-day stock market decline fueled by escalating geopolitical tensions involving the US, Israel, and Iran.
Benchmark BSE Sensex fell 558 points on Thursday amid heavy selling in IT shares, as concerns over AI-led disruptions and waning hopes of a Fed rate cut after firm US economic data weighed on investor sentiment.
Indian equities on Dalal Street saw volatility as global market trends and fresh tariff concerns linked to Donald Trump impacted investor sentiment. Track Sensex, Nifty50 movement and key market drivers for Feb 24, 2026.
Equity benchmark indices Sensex and Nifty experienced a significant decline, primarily driven by a selloff in IT stocks due to concerns about AI disruption and renewed worries over global trade.
Stock markets rebounded on Friday with the benchmark Sensex closing higher by 316 points after heavy buying in banking and metal shares amid optimism over trade deal progresses and India's participation in Pax Silica.
The BSE Sensex plummeted 1,236 points, wiping out nearly Rs 7 lakh crore in investor wealth, driven by escalating tensions between the US and Iran and subsequent market selloff.
The India-US trade deal has offered a much-needed breather for the Indian information technology (IT) industry, which has been grappling with global macroeconomic uncertainty and subdued client spending over the past few years.
Companies in the lower mcap deciles have recorded the fastest growth in median mcap.
Stock markets closed higher for the second straight session on Tuesday, driven by gains in bank, IT and capital goods shares.
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
Benchmark stock indices Sensex and Nifty closed on a flat note in a choppy session on Wednesday as gains in PSU banks and auto shares were offset by losses in IT stocks.
'The problem is not just slower growth, but also the quality of growth.'
Trade deals ease risks for Indian equities, but weak demand and stretched valuations raise questions over whether optimism -- especially in smallcaps -- can turn into a sustained bull run, points out Debashis Basu.
Retail investors' equity portfolios have significantly underperformed benchmark indices over the past 16 to 18 months.
Market sentiment is likely to remain cautious as investors position themselves for the upcoming Union Budget and the US Fed's interest rate decision, where expectations are muted.
Mutual funds (MFs) have significantly increased their ownership across market segments, but the midcap space stands out with comparatively higher growth. Data reveals that the number of midcap companies with over a fifth of MF ownership has doubled from nine in March 2022 to 18 by March 2025. In contrast, largecap stocks saw only a marginal rise, from three to four such companies during the same period.
Flexicap fund performance depends heavily on the fund manager's decisions.
The BSE Smallcap index hit an over eight-month low of 47,627.96, falling 3 per cent in Tuesday's intraday trade amid selling pressure due to ongoing tariff-related concerns and rising geopolitical tensions.
Over 50 per cent, or 660 stocks, from the BSE 1000 index recorded negative returns during CY25.
The number of rights issues more than doubled and hit a 28-year high in 2025, even as qualified institutional placements (QIPs) shrank amid a broader market correction and the Securities and Exchange Board of India's (Sebi's) revised framework for rights issues.
Trading pattern in the stock market this week will largely depend on the ongoing Q3 earnings announcement from corporates, global trends, and foreign fund movement, analysts said. Moreover, geopolitical developments and any update on trade negotiations would also be keenly tracked by investors, experts noted.
Investing in gold trumped most other asset classes in terms of compounded annualised returns over the long term, suggests a report by FundsIndia.
Passive funds have resumed gaining ground in the mutual fund (MF) industry after a slowdown in 2024, with their share of assets under management (AUM) reaching an all-time high in 2025. The surge has been driven largely by robust inflows into gold and silver exchange-traded funds (ETFs).
Global risks include a potential delay in the US-India trade agreement, the possibility of a sharp correction in US equity markets, and renewed geopolitical tensions.
2025 marked a shift in investor preference when it comes to MF schemes.
'Retail portfolios were going nowhere even as headline indices moved higher, prompting investors to sell holdings and shift money to IPOs, attracted by listing-day gains.'
Ask rediffGURU and PF expert Nitin Narkhede your mutual fund and personal finance-related questions.
'The volatility in the stock markets since September 2024 has hurt the pace of accretion of new investors.'
The 2025 contraction marks the steepest decline in both the number of billionaire promoters and their aggregate wealth since 2012.
The post-Covid euphoria surrounding direct equity investing has ebbed in 2025. Individual investors have turned net sellers in the domestic equity market, pulling out about 8,461 crore so far this year - a sharp reversal from the record purchases seen in 2024, according to a report by the National Stock Exchange of India (NSE).
Retail investors are moving away from a buy-and-hold approach and towards more informed short-term positioning, recent investment patterns show.
Among Sensex firms, Tata Steel, Eternal, UltraTech Cement, Larsen & Toubro, Maruti and Bharti Airtel were the major gainers. However, Hindustan Unilever, Sun Pharma, ITC and Asian Paints were among the laggards.
'The first time India has seen two consecutive blockbuster IPO years.'
Unless the primary market momentum slows, smallcap stocks will stay subdued.
Largecap equities are less volatile than mid- and smallcap stocks, making them suitable for risk-averse investors.
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances