Mid Caps & Small Caps CRASHING! What's REALLY Going On? | CA Rachana Ranade #midcap #smallcap
Published: 2025-02-18
Status:
Available
|
Analyzed
Published: 2025-02-18
Status:
Available
|
Analyzed
Predictions from this Video
Incorrect: 0
Prediction
Topic
Status
Some fund managers anticipate further declines in mid-cap and small-cap stocks.
"A few fund managers believe that this is still the beginning of the fall. There is much more fall left."
Pending
Conversely, other fund managers believe mid-cap and small-cap stocks are nearing their bottom.
"There are a few fund managers who believe that we are more or less towards the bottom point of this fall."
Pending
Historically, mid and small-cap stocks experience larger drawdowns than the Nifty during significant market corrections.
"On average, mid-caps and small-caps have fallen 1.5 times more than what Nifty has fallen during past corrections of around 20%."
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Historical data suggests that during corrections of approximately 20%, mid and small-cap stocks tend to fall 1.5 times more than the Nifty.
"In such a case, you will find that mid-caps and small-caps have fallen on average 1.5 times more than what the Nifty has fallen."
Pending
A significant portion of small-cap stocks, previously trading at 51-60 PE multiples, have moved into the sub-12 PE multiple category.
"Small caps between 51 to 60 p valuation ruffle 5 p of the small caps were of the small cap index consist ruffle 5 p were between 51 to 60 p multiple and that shot up to almost 12 p"
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The number of small-cap stocks trading at PE multiples above 60 has also decreased, now falling below 10 PE.
"If I am talking about more than 60 caps ruffle 5 p and shed more than that were in the ab 60 category and now it's more than 10 p again which are in the ab 60 category this is for small caps"
Pending
The proportion of mid-cap stocks trading in the 51-60 PE multiple range has increased from roughly 7-10 to approximately 15.
"Around 7 pence and 7 to 10 pence I can see between the 51 to 60 category and now it's almost almost 15 pence in the 51 to 60 category"
Pending
Approximately 20% of mid-cap companies are now trading at PE multiples of around 60, an increase from about 10% previously.
"What 10 pence of the mid cap constituents companies are about 60 pence and right now it's almost 20 pence of the companies in the mid cap space that are havely trading at a crazy pence multiple of almost 60"
Pending
The Nifty Small Cap index's current PE is slightly below its 5-year median PE, indicating it's fully valued rather than overvalued.
"For five year you can see that we are already below the average slightly below the five year median PE average we are at 27.5 of PE and median index is at 28"
Pending
The Nifty Midcap 100 index continues to exhibit overvaluation, with its current PE of 34.4 significantly higher than its 5-year median PE of 25.6.
"And here you will see mid caps are still over valued mid caps you can see median is 25.6 And index p is 34.4 Still is there overvaluation in mid caps yes"
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The speaker strongly advises against stopping SIPs during market downturns, as it leads to lower average purchase costs.
"And the short answer is no obviously not why hey baba this is maths in a falling markets if you are doing SIP then you are going to get a lower averaging obviously right so any one who is saying that if markets are falling don't do SIP it is nonsense according to me"
Pending
The Nifty index has strong support at 22,800 and potentially at 21,800, with the latter representing a worst-case scenario.
"Ideally 22800 is a very strong support we have tested that support we have bounced back from that support so many number of times even if it is broken another support at 500 points and one more very strong support at 21800 so even if I say worst it may go down to 21800"
Pending
If the Nifty experiences a further 4.2% decline, mid-cap stocks (Nifty Midcap 100) could see an additional fall of approximately 6.04%.
"When Nifty fails by 13.2 and mid caps fail by 19 then if the further downside in Nifty is expected At 4.2 then what is the further expected fall in mid cap 100 that will come mathematically to 6.04"
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If the Nifty declines by an additional 4.2%, small-cap stocks could experience a further fall of approximately 6.84%.
"and small cap will mathematically come to 6.84"
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In a highly pessimistic scenario, if a gap at 20,300 on the Nifty is filled, it represents an additional 11% downside from the current level.
"There is a gap at 20300 in Nifty and if that gap were to be filled then what are you baba in that case it is further 11 downside from here for Nifty"
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If the Nifty falls to 20,300 (a 11% drop), mid-cap stocks could potentially fall by an additional 15.8%.
"and mathematically 15.8 downside for mid caps"
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In the same pessimistic scenario where Nifty falls to 20,300, small-cap stocks could see an additional decline of 18%.
"and 18 downside for small caps"
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The speaker's current belief is that the Nifty index is unlikely to fall below 21,800.
"I believe that nothing more than 21800 as to what ever we know of now"
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The speaker is optimistic that the market will at least reach its previous all-time high and potentially move higher.
"Previous ATA is for sure what ever was the previous all time high that is going to be hit and after that we may go higher"
Pending
Some fund managers believe the decline in midcaps and smallcaps is just beginning, with further falls expected.
"few fund managers believe that this is still the beginning of the fall. There is much more fall left."
Pending
Conversely, some fund managers believe the market is nearing the bottom for midcaps and smallcaps.
"There are a few fund managers who believe that we are more or less towards the bottom point of this fall."
Pending
Historically, during 20% market corrections, mid-caps and small-caps have fallen approximately 1.5 times more than the Nifty.
"if you Check any past falls which are around 20 percent. Around 20 percent. Okay, in that case, you will find that mid-caps and small-caps have fallen on average 1.5 times more than what the Nifty has fallen."
Pending
The Nifty Midcap index (Nifty Midcap 100) is still overvalued, with a PE of 34.4 compared to a 5-year median PE of 25.6.
"mid caps are still over valued mid caps you can see median is 25.6 And index p is 34.4 Still is there overvaluation in mid caps yes"
Pending
Investors should not stop their SIPs in midcap and smallcap funds during market downturns, as it allows for rupee cost averaging at lower prices.
"if you are investing in small caps and mid caps should you be stopping your SIP and the short answer is no obviously not why hey baba this is maths in a falling markets if you are doing SIP then you are Going to get a lower averaging obviously right"
Pending
Market downturns in midcap and smallcap indices are temporary, and they are expected to eventually reach previous highs and potentially surpass them.
"there is going to be a turnaround and some one the other it is going to reach the previous high go higher than the previous high this is going to happen with at the index level"
Pending
While some turbulence is expected in midcap and smallcap stocks, fundamentally strong companies are unlikely to crash.
"you can expect some turbulator ahead so you can expect some turbulator caps but I don't think that the mid caps and small caps are going to crash if they are fundamentally strong"
Pending
The Nifty index has strong support at 22800, with further support levels at 22300 and a very strong support at 21800.
"ideally 22800 is a very strong support we have tested that support we have bounced back from that support so many number of times even if it is broken another support at 500 points and one more very strong support at 21800"
Pending
If the Nifty experiences a further 4.2% downside, the Nifty Midcap 100 index could see a mathematically derived further fall of 6.04%.
"if the further downside in Nifty is expected At 4.2 then what is the further expected fall in mid cap 100 that will come mathematically to 6.04"
Pending
If the Nifty experiences a further 4.2% downside, the Nifty Small Cap index could see a mathematically derived further fall of 6.84%.
"and small cap will mathematically come to 6.84"
Pending
There is a possibility that the Nifty could fall to the 20300 level, which represents a significant downside.
"if you feel that it could go to 20300"
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If one strongly believes the Nifty will fall to 20300, it would be prudent to exit midcap and smallcap investments.
"if I were a strong believer that Nifty will go only that much 20300 then I would not have stayed in small caps and mid caps at this level"
Pending
The speaker believes the Nifty will not fall below the 21800 level based on current information.
"I believe that nothing more than 21800 as to what ever we know of now"
Pending
The Nifty index is expected to reach its previous all-time high and potentially surpass it.
"previous ATA is for sure what ever was the previous all time high that is going to be hit and after that we may go higher"
Pending