Small, Midcap Stocks Plunge 8%; PB Fintech, Swiggy, Ola Electric Lead Losses. What's Next?

• Small and midcap stocks fell sharply on December 16, with the Nifty Smallcap 100 down 0.92% and Nifty Midcap 100 down 0.83%.
• PB Fintech, Swiggy, Ola Electric, Bharat Dynamics, KPIT Technologies, and Premier Energies were among the top losers.
• Experts attribute the fall to declining risk appetite, high valuations, global uncertainties, profit booking, and a weak rupee.
• The drop is seen as increased caution and normalization after an upward trend, rather than a long-term fundamental issue.
• Analysts advise caution due to stretched valuations and suggest a staggered investment approach with a longer horizon for midcaps.

Why It Matters: Small and midcap stocks saw a sharp correction due to profit booking and high valuations; caution advised.