NIFTY Midcap 100 tumbles 6% in one month; falls below 200 EMA; PB Fintech, Godrej Properties worst hit

Indian equity markets opened on a flat note and extended the sideways trend by afternoon on Friday. The NIFTY50 oscillated between gains and losses in the intraday session amid high volatility. Meanwhile, the broader market indices extended their pullback from record high levels as the NIFTY Midcap 100 tanked over 340 points and Smallcap 100 dropped 0.2% on Friday.

Investors chose to remain on the sidelines, booking profits in the rallied midcap and smallcap stocks, while muted activity prevailed in the largecap category. However, the midcap 100 index witnessed the sharpest dip in September, erasing almost 6% of the gains from the record highs.

Midcap 100 was the first one to hit fresh record highs in the pullback rally from 2025 lows, amid broad-based buying by the foreign and domestic institutional investors. However, in the recent pullback from the record highs, the index erased almost all the gains made in the past four months.

Chart check

On the technical charts, the index on Friday broke its 200 EMA support level of 60,850, suggesting a fresh breakdown. Additionally, a decisive close below this level opens the gates for June swing low trendline support of 59,300.

Weak market breadth

The index breadth for the NIFTY midcap 100 for September indicates skewedness towards declines as 80 out of 100 stocks traded in red on a monthly basis, while only 20 traded in green. On the flip side, 67 stocks from the NIFTY smallcap 100 index traded in red, while 33 in green. The NIFTY smallcap index has erased just 2% of the gains from the record highs as investors continued to remain bullish on smallcap stocks on every fall.

Index heavyweights suffered

Besides the broader weakness, the top constituents of the index led to the majority of the fall. PB Fintech, which holds 1.98% weightage in the index, fell over 36% in a month, contributing prominently in the index’s fall. Followed by IndusInd Bank (-9.1%), Coforge (-5.9%), Federal Bank (-4.9%), Hero MotoCorp (-5%), and Paytm (-3%) also contributed to the recent correction from the record highs. Besides these top index constituents, shares of Godrej Properties, KEI Industries, Bharat Dynamics, Havells India, Premier Energies, Suzlon Energy, among others fell as much as 18% in the same period.

Earnings correction

Amid the volatile global economic scenario and elevated crude oil price majority of the analysts covering the midcap stocks polled for a small correction in overall earnings growth. The current drawdown from the record highs also discounts the impact on margins and the bottom line from the elevated crude oil prices in the current quarter.

According to NSE’s latest market pulse report, the top most covered 200 stocks could see a 9% drop in earnings growth. At the sectoral level, Consumer durable, building materials, chemicals, and automobile sectors could see a margin impact from elevated crude oil prices, leading to earnings downgrades for the coming quarter.

Disclaimer: This article is written purely for informational purposes and should not be considered investment advice from Upstox. Securities mentioned are illustrative and not recommendations. Please consult a financial advisor before making any investment decisions.