A day after a sharp fall, the Indian equities are expected stay calm. At 8 am, the SGX Nifty trades at 17,433, indicating a positive opening for Nifty with 60 points gain on Tuesday even as investors are gauging the impact of the US Fed's hawkish stance. The Nifty futures on Monday closed at 17,370.

Analysts said the focus now shifts to GDP data for the domestic markets that will be out on August 31.

"Given the global uncertainty, India’s Q1-FY23 GDP data this week could provide some relief in an otherwise lacklustre market," said Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services Ltd.

BofA's bullish stand

Market experts believe that the pain would be only for a short-term as Indian fundamentals look better.

BofA Securities in a note on Nifty outlook said: "While we expect further downside risks to earnings from spillover effects of weakening global macro and high base for Nifty50 profits for the rest of FY23, it is unlikely to be steep near-term, given sharp correction in crude/commodities."

"Potential for fiscal surprise on stronger-than-estimated tax collections, 5G auctions and disinvestment revenues; and potential for continued reforms: power sector reform could potentially be the next large reform. If these factors cumulatively play out, Nifty could be at the higher end of our estimated target band at 19,500, BofA Securities saidit said.

Meanwhile, Asian stocks are ruling in the green. Equities across Japan, Australia, Korean and Taiwan are up in the range of 0.4 per cent to 0.9 per cent even as the US stocks closed weak.

'Buy on Dips'

Santosh Meena, Head of Research, Swastika Investmart Ltd, said: The overall structure is bullish; therefore this correction is a buying opportunity because the market may try to approach a fresh all-time high near Diwali.

According to Khemka, in the near term, traders should remain cautious due to increasing volatility, while long-term investors could use correction as an opportunity to accumulate quality stocks.

In terms of sector, according to Meena, Banking, Capital goods, Infra, Auto and Consumption may continue to outperform while information technology may also see buying interest from lower levels.

"The market is already discounting a hike in interest rates while cool off in inflation may help to improve sentiments," he added.

"Our market has already digested a fair share of the global weakness which began around ten months back. We believe a systematic allocation to equities is the best way to navigate these alternate bouts of market decline and recovery" said Vineet Bagri, Managing Partner- TrustPlutus Wealth.

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