BENGALURU, March 15 Reuters Indian small and midcap share indexes have lost about 70 billion in combined market value this week, after the country39;s markets regulator raised concerns about froth and suggested mutual funds limit lump sum investments.

These stocks are also set for their worst week in 15 months, as mutual funds start disclosing results of stress tests ordered by the Securities and Exchange Board of India to assess their resilience to sudden redemption pressures.

The data showed a disparity in the duration that the houses would take to liquidate their portfolios.

In a blistering rally that began nearly a year ago, the Nifty smallcap 100 index nearly doubled in value and the midcap index rose about 60, hitting record highs this February and sharply outperforming the bluechip indexes.

Even without stress tests, one thing is clear the broader market valuations are unsustainable and some pockets are frothy, said VK Vijayakumar, chief investment strategist at Geojit Financial Services.

The Association for Mutual Funds in India AMFI has asked members to moderate inflows into small and midcap funds and protect investors from large outflows, after strong inflows raised worries of a potential crash.

Despite the recent correction, these stocks are at lofty valuations, said analysts at Kotak Institutional Securities, adding that many lowquality stocks may still have a long way to fall.

However, AMFI data for February last week showed that smallcaps continued to…