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Warning for stock market investors, say leaders

A lot of news is starting to come in to make the stock market investors nervous. After SEBI Chairman Madhabi Puri Buch said that SEBI has detected signs of fraudulent price fluctuations, especially in the small and medium investment segment, the stock markets are starting to get jittery.



Madhabi Puri Buch cautioned investors that many stocks in the small and mid-cap segment are trading at overvalued prices.

Following this, for the past three days, small and mid cap stocks have been facing selling pressure in the stock markets. Only yesterday, the small cap index of Mumbai Stock Exchange was 5.11 percent; The midcap index also fell 4.20 percent.

Decline Since the 19th of last month, 80 per cent stocks in the small cap index of the Mumbai Stock Exchange have been in decline.

Yesterday, the small and midcap indices of the national stock market also suffered their worst decline in recent times.

Companies with a market capitalization of less than Rs 5,000 crore fall under the small cap category. The mid-cap category includes companies with a market capitalization of between Rs 5,000 crore and Rs 20,000 crore.

The Sebi chairman had said that the valuations of this segment of stocks are being artificially inflated and due to this undue enthusiasm is being shown in investments.

Meanwhile, Ashish Chauhan, managing director of the National Stock Exchange, has issued a warning yesterday that "small investors who are unable to handle large amounts of risk should not engage in such investments."

It is noteworthy that he said this while the small cap index fell the most since December 2022 yesterday.

He further stated that only risk-averse investors should invest in risky investments and that there should be more restrictions on investing in such stocks.

However, stock market experts are of the opinion that this decline is just a starting point and further declines are expected in the coming days.

They also said that this decline was long overdue due to overvaluation and undue exuberance. Shares of this segment may fall by at least 5 percent further, they said.


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