Investors lost Rs 12 lakh crore, understand the reason
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Share Market Crash: Wednesday was a very disappointing day for the Indian stock market. Midcap and smallcap stocks fell flat during trading. Nifty Midcap 100 index was trading down by 4.88 percent i.e. 2,348.65 points. At the same time, Nifty Smallcap 100 index fell by 838.65 points or 5.56 percent. During this period investors had to suffer a loss of Rs 14 thousand crores. Due to the tsunami of Giwat, at 3 pm the Sensex was trading at 72,723.91, down 1.28 percent or 944.05 points. Whereas, Nifty fell by 1.44 percent or 321.45 points at 22,014.25. However, what is the reason for this big decline? Let us explain this in three points.
Read Also: After SEBI’s concern, ICICI imposes check on investments in mid and small-cap schemes
What is the reason for the decline in Sensex, Nifty and Smallcap?
- The first reason behind the decline in the stock market is the statement of SEBI Chairperson Madhabi Puri Buch in which she talked about the formation of a bubble in small cap and mid cap. He had also given a warning regarding this. Last month, mutual funds were asked by SEBI to create a system to protect the interests of smallcap and midcap investors. In this, Madhabi Puri had said that there is foam at some places in the market. Some people call it bubble, some may call it foam. It would not be appropriate to let that foam remain. He warned that the evaluation criteria are off the charts and not supported by fundamentals.
- ICICI Prudential Mutual Fund has said that it will not accept lump sum money in mid-cap and small-cap schemes from March 14. Earlier, Nippon, Tata and SBI MF have banned lump sum investment. However, ICICI will be the first fund manager house to impose checks on midcap investments.
- Selling dominated the Indian stock market on Tuesday. Due to this, most of the indices closed with red mark. Midcap and smallcap were already facing pressure. More than 80 percent of the stocks in the BSE Smallcap Index have recorded negative returns since February 19. However, in the same period Nifty has increased by about one percent.
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