Small, midcaps singed by profit booking; Zee, Vodafone Idea worst hit

The broader market, like the equity benchmarks, trade lower on profit booking, as small and midcap indices plunged. The Nifty smallcap 100 and the midcap 100 indices were down around 2 percent each.

The meltdown titled the market breadth heavily in favour of losers. Nearly four stocks fell for each that rose. About 684 shares were up, 2,556 were down and 65 were unchanged.

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Vodafone Idea plunged 14 percent amid concerns that the company's Rs 45,000-crore fundraising plan may not be enough to rescue the telco.

Zee Entertainment Enterprises was the other major laggard, tumbling over 4 percent after the company set up a panel to examine the allegations against the firm, its promoters and key managerial personnel by regulatory bodies.

Among sectors, media, realty and PSU banks were the worst hit, having slumped over 2 percent each.

The sharp sell-off in the small and midcaps was expected, as valuations had turned frothy after the bull in 2023. The Nifty smallcap delivered 74 percent returns in the past year and the the midcap 100 index gained more than 60 percent.

The exuberance pushed valuations way above fundamentals in several segments, making analysts cautious on a further upside. The correction in the broader market is healthy and will pull some counters out of the overbought zone, analysts said.

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