According to Malcolm Freeman of Ambrian Partners, this correction was a kind of fund liquidation. But he maintains that fundamentally nothing has changed. As per him, "If the LME closes lower three days in a row for all the metals, that would trigger a lot of funds into start selling their holdings."

Excerpts from CNBC - TV18's exclusive interview with Malcolm Freeman:

How much further is this correction likely to go on?

This long overdue correction was definitely liquidation. It felt like fund liquidation as well. We saw the market drop very aggressively. Copper and zinc particularly got heavily hit.

It is settling down at the moment. But I would obviously say that there would be a drop followed by a slight bounce. We will see a true picture emerging as we go into the morning session. What we have to understand is that it doesn't take this one down day to stop any major fund liquidation.

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But if the LME closes lower three days in a row for all the metals, that would trigger a lot of funds into start selling their holdings.

Are you surprised by the intensity of the fall in one trading session?

It is kind of the funds, which trade on momentum and market movement. Those are the people, who are going to go and sell first. When they see market stalling and rolling over they will try and sell. The problem is that the buyers aren't just there.

Has anything changed in terms of fundamental factors for this market, or is this pure fund liquidation at this point?

The fundamentals haven't changed. One can make the argument that the prices are far higher than the fundamentals. We are now going to start getting into an area of correction, where the markets maybe back to fundamentally based prices and possibly exaggerated fund driven prices.

One has also seen a knock on in the London share market this morning as well. The entire metal and mining sector was being sold bringing down the base metal prices.

So would you still maintain not to go by what happens today and look at how it pans out over the next three days?

We want to look at the action over the next 2-3 days. If the market closes lower three days in a row that is when one could see aggressive selling.

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