Midcap stocks took a big hit in February, dropping by as much as 30%. Investors rushed to sell their shares or limit their losses. This negative sentiment was due to both global and national issues. On one hand, fears of tariffs from Donald Trump and worries about a slowing U.S. economy affected the markets. On the other hand, a lot of midcap companies didn’t meet their earnings expectations for the last quarter, which hurt local investor confidence.
The BSE Midcap index lost 4,500 points or 10% in February. This week, the decline was even worse, with the index falling by 1,800 points, or 4.4%. Out of 132 stocks in this index, 123 ended the month lower, while only 9 saw gains. The ten stocks that fell the most included Rail Vikas Nigam, Tube Investments of India, Gujarat Gas, and others, which saw their prices drop by 20% to 30%.
In the past week, there were no stocks that went up, but IREDA, New India Assurance, and Mphasis saw the biggest declines, falling by up to 12%.
The U.S. economy’s growth rate was only 2.3% last quarter, down from 3.1% before, which worried investors. Also, the inflation rate hit 3%, much higher than the Federal Reserve’s target of 2%.
On the home front, around 34% of midcap companies missed their earnings goals. Despite some support from domestic investors, foreign investors sold off a lot of Indian stocks, totaling Rs 11,639 crore in one day—the highest in February. Over the month, they sold Indian stocks worth Rs 34,574 crore, only buying shares on two days.
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