'Equity markets can't be a one-way street,' says White Oak Capital's Prashant Khemka

White Oak Capital's Prashant Khemka on Wednesday termed the small cap meltdown bourses are seeing as a healthy, not worrisome correction.

"Equity markets can't be a one-way street. There was overconfidence setting in among investors particularly in small caps," he said in a interaction with CNBC-TV18.

The benchmark BSE Smallcap index plunged over 4 per cent, leaving a painful hole in retail investor pockets. The selling was so harsh that 1,050 stocks, mostly smallcap and midcaps, hit lower circuit limits on BSE.

"Correction like this will safeguard from a collapse later on," he said.

BSE midcap index tanked 1602 pts to 37,635, signaling weakness in the broader market. On the BSE, small cap stocks were annihilated with the index slipping 2079 pts to 40,752 level.

Sebi's warning of valuation froth in the midcap and smallcap space and the announcement of halt in lumpsum payments in SIPs by a couple of large mutual fund houses weighed in.