Smallcap Carnage: Build your watchlist starting with this smallcap stock
US bond yields hit a multi-decade high just when talks of things getting better were doing the rounds. To add to the negatives plaguing the market, the war in the middle eastis showing no signs of cooling down. Most of the times, the warning from bond markets should not be taken lightly.
In stock markets, it doesn't take much time for a goldilocks scenario to turn into a nightmare. No wonder it is said, the markets go up by the stairs but come crashing down in an elevator. Looking at the price action over the past one week, especially in the small and midcap space, the writing on the wall was very clear.
Yesterday on a twitter (X as it's called now), there was a discussion on a particular hedge fund liquidating all its holding due to the exit of its CIO. The other day on Monday after the markets fell by 1.2% and the small and midcap space was down by more then 3%, it was quite interesting to look at the institutional data. FIIs had bought.
DIIs had bought too. Who sold? It was the retail investors on Monday. However, the problem is that in stock markets the causes are many for any given effect.
The reasons always follow irrespective of whether they are logical or not. The reason of a hedge fund liquidating its entire India holding due to the exit of its CIO sounded illogical to me. Why would a fund sell its holding if a CIO leaves? The point I am trying to make since the past two weeks in all the articles I have written is that markets are going to fall under its own weight.
It was the valuations in the small and mid-cap space which were alarmingly high. There are many causes to justify the reasons for the fall. While a lot of people would think it is temporary and people do have the habit of writing obituaries for the
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