After two years of strong gains, smallcap stocks fell sharply in 2025, but the correction may be setting up opportunities for long-term investors.
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.
Ask rediffGURU and PF expert Nitin Narkhede your mutual fund and personal finance-related questions.
Largecap equity funds remain suitable for conservative and moderate risk-taking investors seeking relatively stable returns.
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.
Ask rediffGURU Naveenn Kummar your insurance mutual fund and personal finance-related questions.
'When markets go into a budget with excessive optimism, the risk of disappointment is higher.'
Companies in the lower mcap deciles have recorded the fastest growth in median mcap.
Overlap refers to the same stocks appearing across fund portfolios.
Why try to time the market when time in the market works better? History shows that patient investors who stay the course often walk away with the real rewards, says Ramalingam Kalirajan.
'...a mix of asset classes.' 'Include equities for growth (across market caps), debt for stability and liquidity, gold as a hedge against macro and currency risk, and global assets for geographical and economic diversification.'
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.
When it comes to multibagger stocks, patience trumps market timing. Investors who stay invested in fundamentally strong stocks build wealth in the long term, and investors who wait for perfect entry points usually end up confused, late, or out of the market. Here, we will explore the role of patience in multibagger stock investments.
Investors seeking higher returns at relatively higher risk should consider allocation to smallcap equity funds.
Eighteen new-age technology firms went public during the year, a near triple increase from the five firms that debuted in 2023 and 38 per cent more than 2024's tally of 13.
Fund managers advise conservative investors to cap midcap exposure at 10 to 15 per cent of their equity portfolio.
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
'...not merely in managing fiscal mathematics, but in demonstrating conservatism and prudence within that framework.' 'Looking forward, we believe sufficient growth drivers exist -- ranging from government reforms to revival in consumption to favourable monsoons. Numerous factors support the Indian economy.'
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
This exercise allows investors to realign their portfolios with changing market conditions and evolving personal objectives.
The recent evolution in the passive space has given rise to a new category of funds promising to deliver "active" returns through a structured passive approach. These are often referred to as smart beta or factor-based index funds, and they represent a compelling middle ground for investors.
Among the Sensex constituents, Asian Paints, Tech Mahindra, HCL Technologies, Tata Steel, Maruti Suzuki India, Sun Pharmaceuticals, Tata Consultancy Services, ICICI Bank, Bajaj Finance, UltraTech Cement, Mahindra & Mahindra and Tata Motors Passenger Vehicles were the laggards. However, Eternal, Titan, Adani Ports, Bharat Electronics Ltd, State Bank of India, Bajaj Finserv, NTPC and Bharti Airtel were among the gainers.
The Reserve Bank of India (RBI) on Friday delivered a 25 basis point (bps) repo rate cut analysts expected, driven by the strong 8.2 per cent GDP growth in the September quarter. However, analysts do not expect a runaway market rally as the impact of US tariffs continues.
Unless the primary market momentum slows, smallcap stocks will stay subdued.
Among Sensex firms, Bajaj Finserv, Bajaj Finance, Tata Steel, Reliance Industries, Sun Pharma, Tata Motors Passenger Vehicles, Axis Bank and Infosys were among the major gainers. Bharti Airtel and Asian Paints emerged as the laggards from the pack.
Largecap equities are less volatile than mid- and smallcap stocks, making them suitable for risk-averse investors.
The average daily turnover (ADTV) in the derivatives market rose to a 12-month high in October, touching 506 trillion - up nearly 46 per cent since June - as volatility picked up and concerns over further regulatory tightening eased. Derivatives activity had slumped earlier this year after the Securities and Exchange Board of India (Sebi) capped weekly expiries to two days and discontinued weekly contracts on non-benchmark indices.
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
Among the Sensex shares, Infosys, Tata Motors, Axis Bank, Adani Ports, Mahindra & Mahindra, HDFC Bank, Larsen & Toubro, Tata Steel, BEL and Power Grid were among the lead gainers. Kotak Mahindra Bank, ICICI Bank, Bharti Airtel, Asian Paints, Bajaj Finserv, and Titan were the among the laggards.
Ask rediffGURU Naveenn Kummar your insurance mutual fund and personal finance-related questions.
Mid-cap and small-cap mutual fund schemes have continued to attract strong investor interest, garnering nearly Rs 30,350 crore in inflows during the April-September period of the current financial year, driven by impressive returns delivered by these segments. In comparison, the cumulative inflow into mid-cap and small-cap funds stood at Rs 32,924 crore during the same period last year, according to data from the Association of Mutual Funds in India (Amfi).
Passive funds appeal to investors seeking to avoid the risk of underperformance by the fund manager and minimise the need for frequent chopping and changing of funds.
Ask rediffGURU Reetika Sharma your insurance, mutual fund and personal finance-related questions.
Among major Sensex gainers Bajaj Finserv rose the most by 1.42 per cent, Axis Bank gained 0.80 per cent, Infosys by 0.72 per cent, Mahindra & Mahindra by 0.60 per cent, Tata Motors by 0.55 per cent, Bajaj Finance by 0.53 per cent and Tata Steel by 0.52 per cent. Kotak Mahindra Bank, ICICI Bank, HCL Technologies, Bharti Airtel, Maruti Suzuki India, Trent Ltd and Tata Consultancy Services were the losers.
rediffGURU Ulhas Joshi answers your personal finance and mutual fund queries
This marks a rebound after more than two years of underperformance during a strong rally in smallcap stocks.
Ask rediffGURU Naveenn Kummar your insurance mutual fund and personal finance-related questions.
'More than investors, fund houses, and advisors have raised caution and limited flows on small-and mid-caps.'
Ask rediffGURU Naveenn Kummar your insurance mutual fund and personal finance-related questions.
Stock markets will be driven by RBI's interest rate decision, tariff-related developments, global trends and trading activity of foreign investors in this holiday-shortened week, analysts said.
© 2026 Rediff.com - Investor Information - Advertise with us - Disclaimer - Privacy Policy - Sitemap - Feedback - About us - Terms of use - Grievances