What’s The ‘Froth’ In Small and Mid-Cap Stocks?

Broader markets bear investor pessimism as SEBI chief warns of ‘froth’ in mid and Small-Cap segments, triggering a significant downturn

The preceding fortnight proved to be exceptionally challenging for the broader markets, which had enjoyed a strong rally over the past year. Both the BSE Mid-Cap and the BSE Small-cap Index, which witnessed unprecedented gains of around 65-70 per cent each since April 2023 until reaching their respective 52-week highs, experienced a sharp decline due to intense selling pressure, resulting in a market bloodbath.