New Delhi, Feb. 17 -- Indian mid-and small-cap stocks are at the forefront of the sustained market sell-off as investors continued to withdraw billions of rupees from these segments, leaving once-favoured pockets of Dalal Street grappling with significant declines.

The market dynamics have worsened due to earnings downgrades, rich valuations, weak sentiment and escalating global trade tensions, resulting in a significant decline in investor confidence and a sharp pullback in small and mid-cap stocks.

The Nifty Small Cap 100 index tumbled nearly 10% in the past week, marking its biggest weekly drop since March 2020, when it fell by 17.71%. In less than two months of the current calendar year, the index has lost 18% of its value and is do...