We are at tail end of selling in the market; larger part of pain may be over: Deven Choksey
Deven Choksey, MD, DRChoksey FinServ Pvt. Ltd, says Foreign Portfolio Investors (FPIs) previously short sold their holdings in the F&O market and are now making cash market deliveries while withdrawing funds. This situation is expected to resolve soon. There may be some capitulation, especially in the high valuations of small and mid-cap stocks, but large-cap stocks, particularly in the Nifty 50, are showing more stable valuations.
The question on everyone's mind is how much more pain to go before we actually see at least a sustained recovery, if not that, at least the selling should abate.
Deven Choksey: I believe that we are at the tail end of selling in the markets. Maybe the larger part of the pain is over. The data of FPI selling from October onwards till date, shows that except for a couple of months in between, in this month we are likely to see a little lower selling compared to what in previous months we had.
My understanding is that they have actually already short sold their portfolio in the F&O market earlier and currently they are delivering the cash market deliveries and taking the money out. So, on one hand, they are already on the mark to market by short selling the market and on the other hand, they are taking out the capital. That is what they are doing and this process is likely to get over sooner than later.
Maybe some amount of capitulation is not ruled out particularly in the crazy valuations of small and midcaps that could be one of the area, but otherwise in the largecap stocks,
