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The Nifty Midcap index has been on a downward spiral in the last 1 week. Just today, the index shed over 3 percent to its day's low of 30,110, meanwhile, the benchmark Nifty is down around half a percent in today's session.

Including today's decline, the index has fallen over 10 percent from its new high of 33,243, hit on October 19. This has been the biggest one-week fall for the index in the last 1 year.

The correction in the midcap stocks is a result of profit booking, after witnessing a spectacular rise in the last 1 year. The Nifty Midcap index has outperformed benchmarks in the last one year, rising nearly 80 percent as against a 51 percent rise in Nifty50. Meanwhile, the overall market sentiment is also down since FIIs turned net sellers in October further impacting the broader markets.

Since hitting a new high on October 19, all constituents of the Nifty Midcap 100 index have given negative returns. IndiaMart InterMesh declined the most in this period, down nearly 20 percent, while Aarti Industries, Navin Fluorine, Dixon Tech, Coforge, Voltas, Hindustan Aeronautics, and Astral Poly Technik shed over 10 percent each.

Meanwhile, in today's session, Coforge was the top midcap loser, down 9 percent followed by IndiaMart InterMesh, down 5 percent. L&T Tech, Mphasis, Dalmia Bharat, Dixon Tech, Nippon India, and Astral Poly also lost over 3 percent each in today's session.

While experts are still bullish on the broader markets and expect the midcap stocks to generate robust returns in the long term, they believe that the midcap stock may remain choppy in the near term.

Analysts further advise accumulating quality stocks in case of any significant dip since the midcap stocks are likely to outperform large cap stocks in the long run. Investors can focus on new startups, fin tech, EV, green energy, companies where demand is likely to increase in the future, they added.

Going ahead, the stock performance will mainly be based on the second-quarter earnings results and correction is likely to be seen in overvalued stocks whose fundamentals cannot justify its valuations. So, it is very essential for investors to pick the right stock with strong fundamentals.

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