mid and small cap Stocks have taken a huge beating in the past few days. Most of the stocks have fallen by 30% to 40%. Due to this, investors investing in these stocks have suffered huge losses. However, the concerns are still not over. Vinod Nair, head of research, Geojit Financial Services, says that investor sentiments remain weak amid mixed signals from globally. This is influenced by uncertainties regarding important policy decisions of major central banks. Due to this, there is concern about high valuations in mid- and small-cap stocks and large caps are expected to perform better in the medium term. In such a situation, investors investing in these stocks need to be careful.
Buying after big fall
Last week there was buying in mid and small-caps, this is because DIIs and FIIs made good purchases in them. The IT sector faced adverse circumstances due to increase in expenditure. Investors were attracted to the realty sector, which emerged as the top performer of the week, Nair said. Some bounce is expected to continue in the market going forward.
Possibility of market fluctuations
Siddharth Khemka, Head of Retail Research, Motilal Oswal Financial Services, said the next week may see some volatility due to fewer trading days and monthly expiry of derivatives, while Nifty is likely to consolidate at higher levels. Also, investors will keep an eye on US GDP and other key economic data. After 17 years, the Bank of Japan increased interest rates and the ECB kept its rates unchanged. Due to this the sentiments in the market have weakened. However, the market gained momentum after the US Fed indicated that interest rates may be cut.
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