Smallcap index down over 3% in February so far; time for bottom fishing?

livemint.com:

BSE Smallcap index is witnessing a strong sell-off in February. The BSE Smallcap index is down over 3 per cent in February so far while the benchmark Sensex is down about 0.3 per cent. The BSE Midcap index is flat this month.

Some of the stocks, such as Ramky Infra, IFGL Refractories, WPIL, Dhunseri Ventures and PTC India Financial Services have fallen between 25-35 per cent this month. Some 16 components of the BSE Smallcap index have fallen over 20 per cent while as many as 195 components have declined over 10 per cent in the smallcap index. Also Read: FPI flows may remain volatile in the near term, feel analysts Experts believe the smallcap index may see some more downward pressure and investors should shift focus to quality mid and large caps.

Abhishek Jain, Head of Research at Arihant Capital is of the view that one could consider a strategic shift towards larger cap investments, particularly in light of current market dynamics. "In our assessment, large-cap and sizable mid-cap stocks present compelling prospects post-correction. It's prudent to redirect attention towards these segments for potential value and growth," said Jain.

Also Read: How to start investing in the stock market — A step by step guide The smallcap index had seen sharp gains in the recent past and a correction was expected. Some experts point out that the trends of the last few years show that the smallcap index sees a rebound in March after a sell-off in February. "Smallcap stocks had run up quite steeply recently and a correction was warranted.