09/01/2026
At present, fear and frustration are dominating retail investors, which is why many of them are selling shares in panic.
When small-cap and mid-cap stocks fall sharply in a short period, it clearly shows panic selling by retail investors.
Continuous selling by FIIs increases frustration among retail investors. When the market keeps falling for a long time, many investors lose patience and finally sell their stocks at a loss.
During such times, fundamentals stop working — both good and bad stocks fall together.
We saw the same situation in February–March 2025, when our portfolio was also impacted more than usual.
History shows that this type of panic selling usually happens in the final phase of a bear market.
This panic selling has been going on for the last two months and may continue for some more time in January 2026.
When FIIs sell, large-cap stocks usually fall the most.
But when retail investors panic and sell, small-cap and mid-cap stocks get hit the hardest.
This period of fear is actually the preparation phase for the next big rally, because valuations are slowly becoming attractive.
So, the real reason for the market fall is not Trump or global news.
The real issue was excessive valuation.
Until valuations return to normal levels, a strong bull market is difficult to start.
In short:
Fear + frustration = panic selling.
And at the end of panic selling, new opportunities are usually created.
Thank you,
CHANDAN DEY
NISM-Certified Research Analyst (RA)
Reg. Number: NISM-202500109242