Stock market crash: NIFTY midcap and smallcap indices witness the sharpest monthly correction in five years

IT and banking names such as IndusInd Bank, Tech Mahindra, Wipro, and Infosys were the top laggards in the NIFTY 50. In addition, all the sectoral indices traded in red, with NIFTYIT, Auto, and Media losing more than 3% in the intraday move on Friday.

The top gainers on Nifty were Coal India, up by 2.50%; Axis Bank, up by 1.12%; HDFC Bank, up by 0.96%; Shriram Finance, up by 0.51%; and Grasim Industries, up by 0.33%. On the flip side, Tech Mahindra was down by 5.47%, IndusInd Bank was down by 5.16%, Wipro was down by 4.52%, Titan was down by 3.94%, and Maruti Suzuki was down by 3.87%—they were the top losers.

On the broader market front, the NIFTY Midcap 100 and NIFTY SMALLCAP 100 fell 3.2% and 3.3% on Friday, respectively, after losing more than 11% and 14% in February. This steep fall of over 13% in a month is the most brutal fall the index has witnessed in five years.

The sharp correction in the broader indices was largely due to lofty valuations and poor earnings growth in H1FY25. External factors like tariff war headwinds and FII exodus to China also remain key factors for a major fall in the markets.

Chart check on NIFTY midcap 100 and small-cap 100

On the technical front, the NIFTY midcap and smallcap 100 indexes have given a breakdown below their 20 SMA levels on monthly charts, indicating more pain in the coming days. Market participants eye monthly closing above 49,905 on the NIFTY midcap 100 and 16,158 levels on the NIFTY smallcap 100 for any probable recovery in the markets.

Chart Check on NIFTY50 and SENSEX

On a monthly basis, the NIFTY50 and SENSEX have broken their monthly 20SMA levels for the first time since July 2022. The market participants' eye for closing above monthly 20 SMA levels of 22,419 on NIFTY50 and 74,115 on the SENSEX for any signs of recovery back into the markets.

Global markets

All Asian markets were trading lower; the Hang Seng declined 658.21 points, or 2.78%, to 23,060.08; the Jakarta Composite plunged 185.31 points, or 2.94%, to 6,300.14; the Shanghai Composite weakened 45.77 points, or 1.35%, to 3,342.29; the Straits Times fell 28.86 points, or 0.74%, to 3,892.33; the KOSPI dropped 86.52 points, or 3.3%, to 2,535.23; and the Nikkei 225 slipped 1,071.65 points, or 2.8%, to 37,184.52.