Mid- & Small-Cap Stocks See Sharp December Correction

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Steepest Drop in Months
BSE MidCap index falls 2.7%, the sharpest decline since Feb 2025.
BSE SmallCap slips 2.8%, marking the second straight month of weakness.
Sensex & Nifty down 1% each

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Valuations at Elevated Levels
MidCap index trades at 25.23x one-year forward earnings vs 10-year avg of 23.29x.
SmallCap index at 22.6x, well above its long-term average of 18.97x PE

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Why the Sudden Sell-Off?
Experts cite retail fatigue, stretched valuations and unwinding of margin trading positions.
Muted returns in the past year triggered profit-booking across high-beta pockets

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Technical Weakness Emerges
Both indices slip below key EMAs, signaling bearish-to-neutral momentum.
Small-caps enter oversold territory on RSI, but reversal signals are still unclear

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Test-Beds Delayed, Costs Rise, Indigenisation at Risk
The Parliament panel warns that missing test-bed facilities and prolonged delays have forced HAL to write off ₹159.23 crore, threatening India’s aerospace indigenisation goals unless approvals are urgently fast-tracked

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Mid- & Small-Cap Stocks See Sharp December Correction

Steepest Drop in Months BSE MidCap index falls 2.7%, the sharpest decline since Feb 2025. BSE SmallCap slips 2.8%, marking the second straight month of weakness. Sensex & Nifty down 1% each

Valuations at Elevated LevelsMidCap index trades at 25.23x one-year forward earnings vs 10-year avg of 23.29x. SmallCap index at 22.6x, well above its long-term average of 18.97x PE

Why the Sudden Sell-Off? Experts cite retail fatigue, stretched valuations and unwinding of margin trading positions. Muted returns in the past year triggered profit-booking across high-beta pockets

Technical Weakness Emerges Both indices slip below key EMAs, signaling bearish-to-neutral momentum. Small-caps enter oversold territory on RSI, but reversal signals are still unclear

Test-Beds Delayed, Costs Rise, Indigenisation at Risk The Parliament panel warns that missing test-bed facilities and prolonged delays have forced HAL to write off ₹159.23 crore, threatening India’s aerospace indigenisation goals unless approvals are urgently fast-tracked