Nifty Smallcap 100 Index Slips Over 2%: February Blues for Small Cap Index

The Nifty Smallcap 100 Index is designed to track the performance of the small-cap segment of the Indian financial market. It comprises 100 actively traded stocks listed on the National Stock Exchange (NSE). The index is computed using the free float market capitalisation method, meaning its value reflects the collective market capitalisation of all constituent stocks, adjusted for free float.

Market Performance on February 3, 2025

As of 3:05 PM on February 3, 2025, the Nifty Smallcap 100 Index had slipped by over 2%. This decline comes after the index had closed with modest gains of around 0.5% on Budget Day, February 1, 2025. However, in the subsequent session, the index has not only erased these gains but is also trading below the Budget Day low, indicating weak sentiment and selling pressure.

Weak Market Breadth Weighs on Small Caps

The market breadth remains skewed towards declining stocks, further reflecting the bearish sentiment. Of the 100 stocks in the index, 82 stocks were trading in the red, whereas only 18 stocks showed gains. Furthermore, about 13 stocks recorded declines exceeding 5% during the session, while no stock was seen advancing more than 5%.

Underperformance Against Frontline Indices

The Nifty Smallcap 100 Index has significantly underperformed the broader market indices. As of February 3, 2025, it has declined by over 11% on a year-to-date (YTD) basis. 

February: A Historically Weak Month for Small Caps

Analysing historical data, February has not been a favourable month for the Nifty Smallcap 100 Index. Since 2018, the index has closed in the green during February only once, in 2021. On average, the index has recorded a negative return of approximately 1.82% in February since 2012, reinforcing the trend of small caps struggling during this month.

Disclaimer: This blog has been written exclusively for educational purposes. The securities mentioned are only examples and not recommendations. This does not constitute a personal recommendation/investment advice. It does not aim to influence any individual or entity to make investment decisions. Recipients should conduct their own research and assessments to form an independent opinion about investment decisions. 

Investments in the securities market are subject to market risks, read all the related documents carefully before investing