NSE MD and CEO Ashishkumar Chauhan said small investors who do not have the capacity to manage high risk levels should not enter riskier parts of markets. This comes as markets witnessed the the worst single-day fall for smallcap index since December 2022. Smallcap index fell 5% today (March 13) while midcap index lost 3% and microcaps as well as SME stock indices dropped around 5% each.
Read more: Sensex crash today: 12 lakh-crore wiped off. What’s going on?
Leverage must be used for investors who can afford risk, Ashish Chauhan said as he stressed on higher entry barriers risky products. He said at the SEBI-NISM Research Conference, “Equity F&O size seems large, but premium volume less.”
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What ICICI Securities said on smallcaps and midcaps?
Read more: ICICI Pru MF halts fresh subscriptions via lumpsum mode in mid, smallcap schemes
ICICI Securities said in a note, “The market breadth is declining, which is a sign of mean reversion in mid/small cap stocks from over bought trajectory. Mid and small cap indices have rallied 35 per cent since October 2023. Intermediate corrections to the tune of average 12 per cent in mid and small caps have been a bull market norm. At present 8 per cent correction is behind us.”
ICICI Prudential Mutual Fund said that it will not accept lump sum money in its mid- and small-cap schemes from March 14.
Read more: Sebi chief’s ‘froth’ warning: There is a risk of bubble in stock market
Sebi chief’s warning for smallcaps and midcaps
Sebi chief Madhabi Puri Buch said earlier that there is “froth” in small and mid-cap stocks which had “off the charts” valuations which indicates price manipulation in the segment. The valuation parameters are “off the charts” and not supported by fundamentals, she said, adding, “These appear, as regulators like to call it… ‘irrational exuberance’.”
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