SMID correction 2-fold higher than large-caps
image for illustrative purpose
New Delhi: The vulnerability of the small- and mid-caps (SMIDs) to correction remains since the valuations are excessive. Large-caps will witness buying on declines, observe market analysts. “At high valuations the market is vulnerable to sharp corrections and this happened yesterday,” says VK Vijayakumar, chief investment strategist at Geojit Financial Services.
Two trends are important: one, the correction in mid and small-caps is almost double the correction in large-caps; two, DIIs turned big buyers towards the end of the trading day, he said.
Investors can wait for the market to stabilise and buy high quality large-cap stocks on declines, he said.
Vaishali Parekh, vice-president (technical research), Prabhudas Lilladher, said: “Nifty after remaining in the positive zone near 21,500 levels in the initial half tanked post lunch session with heavy profit booking witnessed to produce a huge bearish engulfing candle pattern on the daily chart ending near 21,150 levels to weaken the sentiment and turning the bias to cautious mode as of now.”
