SEBI's Bubble Warning: Investors Lost 47 Billion Dollars In A Week

Last Week and This Week

The last few days did not prove to be good for the stock market. This week was especially bad for the small-cap and mid-cap segment. Heavy selling was seen in both segments, due to which stock market investors lost billions of dollars.

Small-cap and mid-cap stocks

Small-cap and mid-cap stocks had shown a spectacular rally before this fall. Last year, both these segments were far ahead of the main indices in terms of giving returns.

SEBI Chief's Bubble Warning

A statement by SEBI Chief is being believed to be the reason for the recent decline. Market regulator SEBI chief Madhabi Puri Buch had expressed concern over the valuation of mid-cap and small-caps and warned about the bubble.

how the rally came

In the tremendous rally that took place during the last year, the Small Cap 100 index had almost doubled. At the same time, a rise of about 60 percent was recorded in the mid-cap index. Before the rally was curbed this week, both the mid-cap and small-cap indices had made new lifetime highs last month. Many experts were alerting the market regarding this unexpected rally.

worst week in 15 months

Investors got scared after the statement of SEBI Chief. After that, massive selling started in the market. The situation has become especially bad in the mid-cap and small-cap segments. The day after the statement, the small-cap index fell by 5 percent, while the mid-cap index fell by 4 percent. This week proved to be the worst for mid-cap and small-cap stocks in the last 15 months.

led to decline

Mahadev App scam is also one of the reasons for the big fall in mid-cap and small-cap shares. ED has seized shares worth more than Rs 1000 crore kept in the demat account of an accused linked to the scam. It is being said that the money from Mahadev App scam was being spent in the stock market through mid-cap and small-cap shares.

huge amount lost

Market investors have suffered a lot due to the huge fall last week. During the week, the combined market cap of mid-cap and small-cap companies declined by $47 billion. Had there not been a significant recovery at the last moment, this loss would have been more than $70 billion.