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The stark underperformance suggests investors are throwing in the towel on small-cap shares out of belief that policy support will be focused on rescuing blue-chip stocks.
In a secular bull market, secondary correction is a common phenomenon wherein small cap index has a tendency of correcting 12-15 per cent from swing highs, said ICICI Securities.
​Nifty Smallcap index retreated from a 15-year resistance trend line drawn adjoining 2007-21 high, indicating profi t booking after a 50% rally seen during March-October 2023 amid overbought conditions.