Mid-cap and small-cap stocks have come under heavy selling pressure since the start of December, giving up a portion of the strong gains they delivered over the past several months.
The BSE MidCap index has fallen 2.7% so far this month — its sharpest decline since February 2025.
The BSE SmallCap index has also slipped 2.8%, marking its second straight month of losses.
In comparison, benchmark indices Sensex and Nifty recorded a smaller correction of around 1% each, indicating that the broader market weakness is more concentrated in the mid- and small-cap segments.
The pullback comes after an extended period of outperformance by mid- and small-cap stocks, prompting profit-booking, valuation concerns, and selective sectoral rotation ahead of year-end.
