Broad-based sell-off hits Sensex, Nifty; Midcaps plunge 2%

Mumbai, 25 October (VNI)Indian stock markets witnessed a significant downturn as the Nifty 50 closed at 24,150, down over 1%, while the BSE Sensex tumbled approximately 600 points. Broader markets faced notable pressure as well, with both the BSE Midcap and Smallcap indices shedding around 2%. The sell-off was broad-based, affecting sectors across the board except for a modest gain in the FMCG sector, which rose by about 1% on the strength of stocks like ITC, which managed to close in the green. Key losing sectors included auto, capital goods, metal, oil & gas, power, realty, media, and telecom, each falling between 1% and 1.5% amid heightened global economic uncertainties.

Major laggards among the Nifty stocks included companies like IndusInd Bank, Shriram Finance, Bharat Electronics, Mahindra & Mahindra (M&M), and Hero MotoCorp. However, a few stocks, such as ITC, Axis Bank, Sun Pharma, Asian Paints, and Nestlé, managed to buck the downward trend. Despite these gains, volatility remained elevated, with the India VIX climbing, indicating investor caution in light of recent global economic developments, including inflationary pressures and interest rate concerns from Western markets​

​This downturn was also fueled by recent market regulator guidelines from SEBI, which directed mutual funds to impose caps on fund flows into midcap and smallcap stocks, in an effort to protect investors from high-risk exposures. This policy shift contributed to a sharp correction in the small and midcap segments, which had previously been favored by investors seeking high growth​