Smallcaps test 200-DMA; more pain likely ahead

Nifty Smallcap 100 has slipped 13% from its 52-week high

- PUNEET WADHWA & REX CANO

Smallcap stocks are likely to remain under pressure going ahead, suggest analysts, even as the Nifty Smallcap 100 is testing its 200-day moving average (DMA) on technical charts, placed at 17,490 levels.

The smallcap index hit an intraday low of 16,984 on the NSE on Monday, its lowest level since May 15. The index has slipped around 13 per cent from its 52-week high of 19,598 hit on December 17, 2024.

The smallcap stocks are likely to remain under pressure on the back of liquidity constraints, said G Chokkalingam, founder and head of research at Equinomics Research. He said investors had found favour in the primary markets, given the lack-lustre performance of secondary markets in the last few months, especially the smallcap segment.

“A large number of smallcap stocks are down anywhere between 15 and 50 per cent this year. Retail investors with limited resources preferred to invest in initial public offerings (IPOs) rather than smallcap stocks, given their tepid showing in 2025. Unless the primary market momentum slows, smallcap stocks will stay subdued,” Chokkalingam said.