Smallcap-Midcap Stocks: The stock market saw a huge decline on 11 February. Investors were given the most shock by small and medium shares, which fell by about 3.5 per cent. The high valuation concerns of these shares, weak quarterly results and weak global signals have weakened the morale of investors. Due to which large scale selling has been seen in these shares. Nifty Midcap 100 and Nifty Smallcap 100 have fallen 11.29% and 14.6% respectively so far this year. Whereas in comparison, the benchmark Nifty Index has fallen by just 2.91 percent during this period.
Market experts believe that their valuations have now come to a reasonable level due to heavy selling in large companies, or large companies by foreign institutional investors (FIIs). But the valuation of midcap and smallcap share still remains high.
In Tuesday’s trading session, the biggest decline in small stocks was seen in HBL engineering, swan energy and amber enterprises, which fell to 12%. At the same time, midcap stocks suffered a loss of up to 8% to PB Fintech, Fertilizers and Chemicals Travancore, Escorts Kubota and Oberoi Realty.
Experts’ opinion: 30% more shares may fall
Mirae Asset Sharekhan’s research head Sanjeev Hota says that the ongoing decline in mid and smallcap shares is low. He warned the investors, saying, “There is a possibility of further decline in shares, whose valuation is still very high or their earnings growth is weak. Earlier in 2018-19, when the stock market crashed, then 29 in the Smallcap index. There was a decline of percentage and this time a similar situation can be created. “
Sanjeev Hota further stated that the performance of small and medium shares usually depends on the earnings growth of the companies, but there is no such growth at the moment. Apart from this, he also described the apprehensions related to trade war at global level, the money vizim and domestic economic lethargy as well as the reason for this decline.
He said, “We can see a decline of up to 30 percent from the current level,” he said, “We can see a decline of up to 30 percent from the current level,” he said.
“Reversal may continue to fall, not signs”
Motilal Oswal Financial Services Vice President Ruchit Jain said that midcap and smallcap index are constantly making low -lying levels. He said, “This correction will continue until a strong reversal signal is received.”
Shopping opportunity in big companies: V.K. Vijayakumar
Dr. VK Vijaykumar, Chief Investment Strategist of Geojit Financial Services, said, “FIS’s frequent selling of largecap shares has now come to the appropriate level, while mid and smallcap shares are still expensive.” He advised investors to focus on buying strong large largecap shares in banking, IT, auto, pharma and capital goods sectors and be patient. He said, “FIIS will invest in India again, but this will happen only when the dollar index is weak. It is certain that this will happen, but it cannot be said when it will happen.”
Sensex and Nifty fell for the fifth consecutive day
Meanwhile, the Sensex and Nifty closed down on Tuesday 11 February with a decline for the fifth consecutive day. Both index rolled up to about 1 percent.
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