Small and mid-cap indices of the BSE have taken a bigger hit compared to their bigger peers, with smaller stocks falling up to 12 per cent so far this year. While the small-cap index has fallen by 11.62 per cent to 16,994.36, the mid-cap index dropped 10.43 per cent to 15,962.59, an analysis of their performance showed.

The BSE flagship Sensex, meanwhile, lost 3.19 per cent to 32,968.68 so far this year. The 30-share index had touched its all-time high of 36,443.98 on January 29, 2018.

The small-cap index had scaled its record high of 20,183.45 on January 15 this year and the mid-cap index had hit its lifetime peak of 18,321.37 on January 9, 2018.

“We had a good rally during the first 10 months of FY18, led by strong inflows from domestic and foreign investors. In the last two months, large, mid and small-cap indices have fallen due to selling pressure from LTCG and increase in domestic and global bond yields,” said Vinod Nair, Head of Research, Geojit Financial Services.

Domestic market rally started losing steam from February onwards. The Sensex had surged 6.36 per cent in January, while in February it lost 4.79 per cent and in March it fell 3.16 per cent. Small stocks tend to suffer more during times of uncertainty, experts said.

“As we step into FY19, we see several headwinds like political uncertainties, rising bond yields, global trade issues and slowdown in foreign fund flows. Key triggers for Indian markets in FY19 could be political developments and outcome of large state elections like Karnataka, Rajasthan and Madhya Pradesh,” said Sandeep Chordia, Executive Vice-President Strategy, Kotak Securities.

According to market analysts, smaller stocks are generally bought by local investors, while overseas investors focus on blue-chips. Mid-cap index tracks companies with a market value that is, on an average, one-fifth of blue-chips or large firms. Small-cap firms are almost a tenth of that.

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