SEBI’s Directive: Mid-Small Caps Likely to Face Flow Halt – SIHL

Mid-cap and small-cap segments have been experiencing a consistent slowdown for the past year. The guidance provided by SEBI to mid and small-cap companies is a contributing factor. According to Tanmay Shah, Director of Investors Home, this trend may cause a halt or slowdown in the flow of mood in the stock market. Ordinary meetings are also becoming closer according to him. Investors and traders should pay attention to large caps as per his advice.

Regulatory Errors Affecting Financial Companies

Recently, some financial companies have been showing errors in regulations by RBI. IIFL Finance faced errors in IPO financing while IIFL Gold Loan faced errors in IIFL Finance. RBI has imposed restrictions on JM Financial for lending to shares and debentures. Meanwhile, IIFL Finance has been restricted from offering new gold loans. Previously, restrictions were announced against Paytm FinTech.

SEBI’s Warning to Small and Mid-cap Stocks

SEBI recently warned in a letter about small and mid-cap stocks. Subsequently, there has been a performance outperformance in the market. When positions in small and mid-cap counters need to be reduced, Tanmay Shah suggests that SEBI’s comments may have a moderate impact on the second and third quarters’ performance. Traders should focus on large caps accordingly.

Bank Nifty Can Show a Target of 50,000

Nearby, the benchmark Nifty may show growth towards 22,700-22,800. If 22,000 is breached, traders should consider reducing long positions. Bank Nifty can also show a target of 50,000. After Nifty, the most traded support for Bank Nifty is at 46,500. According to Shah’s advice, it would be advisable to stay out of long positions below it. Nifty Small and Mid-cap 100 indices made their new highs four weeks ago and are now in correction mode.