Mid-cap and small-cap stocks had a strong showing in the last two weeks aided by liquidity, favourable global cues and government measures which gave bulls the hope of recovery in the face of an economic slowdown. However, escalating tensions between Iran and the US, which led to a surge in crude oil prices, have triggered a massive sell-off across the board. One-fifth of the BSE 500 companies have eroded their entire December gains in just two trading sessions. The BSE Sensex which gained 1.13 per cent in December 2019 has declined 2.28 per cent in the last two trading sessions while the BSE MidCap index which rose half a percent in December has lost 2.74 per cent in the last two days. Similarly the BSE SmallCap index which rallied 1.02 per cent in December has declined 1.93 per cent. Mid- and small-cap stocks which have recovered in the last few trading sessions are likely to be shunned by investors in case of any conflict in the Middle East, said analysts.

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