Retail investors offloading in SMIDs
Rush to close leverage-based positions resulted in correction for small-cap and mid-cap stocks
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New Delhi: After touching a new high, the domestic market witnessed a correction due to concerns over the broader market valuation and increase in volatility, says Vinod Nair, Head of Research, Geojit Financial Services.
The unfavourable risk-reward balance of mid- and small-cap stocks, fuelled by prolonged premium valuations, has aggravated the downfall. Mid- and small-caps corrected led by selling from leverage-based retail investors, he said.
“We expect bargain opportunities to persist in mid- and small-cap stocks whose valuations are supported by fundamentals. Meanwhile, FMCG and contrarian plays like gold are offering some refuge,” he added.
The week ahead, the global central bank’s monetary policy decision will get investors’ attention. The US FED, BOJ, and BOE will unveil their rate decisions.
