<div id="readability-page-1"><div id="parent_top_div">Bears took charge of Dalal Street on the week’s first trading session on Monday, March 9, as the benchmark indices Sensex and Nifty tumbled over 3 per cent each during intra-day deals. The sharp sell-off came as the conflict in the Middle East entered its tenth day, pushing crude oil prices higher. The BSE Sensex was down 2,494 points, or 3.16 per cent, at 76,424. Likewise, the Nifty 50 index crashed 753 points, or 3.07 per cent, to quote an intraday low of 23,697. The sell-off, however, was more pronounced in the broader markets, with the Nifty Midcap100 and Nifty Smallcap100 indices plunging 3.57 per cent and 3.64 per cent, respectively, during intraday deals on Monday. At last count, the Nifty Midcap100 index was trading with a loss of 3.29 per cent, while the Nifty Smallcap100 index was down 3.10 per cent. In the midcap space, Union Bank of India, Hindustan Petroleum Corporation, Indian Bank, and Steel Authority of India were among the top laggards, trading with losses of up to 7 per cent. Similarly, in the smallcap space, Tejas Networks, SWAN Corp, Mangalore Refinery and Petrochemicals, and Karur Vysya Bank were among the top laggards, trading lower by up to 8.3 per cent. Analysts attributed the market fall to multiple factors, including panic triggered by ongoing geopolitical tensions, high valuations, retail anxiety, limited liquidity, and weak institutional support. “The sell-off is driven by panic caused by the ongoing war. Historically, whenever the broader market declines, small- and mid-cap stocks fall more, with small-caps taking the biggest hit. This is due to higher retail panic, limited liquidity, and lower institutional support. Such steep declines are usually followed by strong recoveries as valuations become attractive. Over the past 20 years, there has been only one instance when the Nifty fell while small-caps were marginally positive. Otherwise, small- and mid-cap stocks have consistently fallen more than large-caps during market corrections,” said G Chokkalingam, founder of Equinomics Research. During panic-induced declines, small- and mid-cap stocks have at times fallen sharply—sometimes by as much as 100 per cent—but have invariably recovered. “Over the past two decades, the key factor has been valuations becoming highly attractive. Small-caps crash, valuations drop, and a boom follows. For example, the post-Covid rally in small-caps delivered gains of around 40 per cent,” Chokkalingam added. He said the cycle follows a simple logic: as valuations turn cheaper, they become more appealing compared with safer large-cap stocks. “This pattern is likely to repeat now, as nine out of ten small-cap stocks are sharply down, making valuations extremely attractive,” he said.</div></div>

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Panic selling hit Dalal Street on March 9, with benchmark indices Sensex and Nifty dropping over 3% amid escalating geopolitical tensions in the Middle East. The BSE Sensex fell 2,494 points (3.16%) to 76,424, while the Nifty 50 dropped 753 points (3.07%) to an intraday low of 23,697. Broader markets suffered more, with Nifty Midcap100 and Smallcap100 indices down 3.57% and 3.64%, respectively. Analysts attribute the decline to panic selling, high valuations, and limited liquidity, noting that small- and mid-cap stocks typically experience sharper declines but often recover strongly as valuations become attractive.

Panic selling grips SMIDS as geopolitical fears drag benchmarks down 3%