An $80 Billion Crash in India’s Small Caps Flashes Warning Signs
- BSE’s small cap index is down more than 11% from a record high
- Regulators are concerned about potential for bubbles
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A sharp correction in small-cap stocks portends souring risk appetite on the broader Indian market, which is now an underperformer in Asia Pacific after a multi-year rally.
An index of small-cap stocks lost more than $80 billion in market value in less than two weeks through Wednesday after authorities flagged risks of overheating and guided funds to limit purchases. Small- and mid-cap stock gauges of the Bombay Stock Exchange rebounded Thursday after plunging more than 4% each in the prior session.