An $80 billion crash in smallcaps flashes warning signs

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Key Points

A sharp correction in small-cap stocks portends souring risk appetite on the broader Indian market, which is now an underperformer in Asia Pacific after a multi-year rally...

An index of small-cap stocks has lost more than $80 billion in market value in less than two weeks after authorities flagged risks of overheating and guided funds to limit purchases..

The selloff deepened on Wednesday, with gauges of small- and mid-cap stocks plunging more than 4% each...

The Securities and Exchange Board of India has been concerned about large flows into small- and mid-cap stocks amid an outsized rally in the riskiest area of the nations $4.3 trillion market over the past year..

Sebi is open to allowing money managers to hold more large-cap stocks in their small-cap portfolio to manage risk, she said.. Buch further said the regulator has observed patterns of price manipulation in new listings taking place on platforms for tiny companies..

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