Smallcap gauge misses bear mkt as rout extends

A months-long selloff in Indian stocks is showing few signs of abating, as a gauge of smallcap shares stretched its losses from a September peak to 20% before dip-buying helped it pare some decline.

- Bloomberg

The Nifty Smallcap 250 Index narrowly missed entering a bear market as it slumped as much as 3.9% on Tuesday before closing 1.8% lower. The gauge had dropped 3.7% the previous day. The NSE India Volatility Index, also known as the fear gauge, rose to the highest level since August on Monday.

Indian stocks have suffered in recent months as concerns over a slowdown in economic as well as earnings growth have seen foreign funds exit the market. Small- and mid-cap stocks seem to be bearing the brunt of the latest slide as risk-off moves deepen amid high valuations.

Overseas investors have withdrawn more than $19 billion from the market on a net basis since the end of September, with over $7 billion of outflows happening in January alone.