Global headwinds continue to roil equity markets, which tumbled for a sixth straight session on Thursday, to their lowest level in four months. The BSE Sensex fell 850 points to 63,119, while the NSE Nifty 50 lost 270 points. The Sensex pulled up a little by 1 pm, when it was down by 798 points, compared to yesterday’s close.

Nilesh Shah, Managing Director, Kotak Mahindra Asset Management Company Ltd said, “There was a barrage of bad news in the last few weeks. The geopolitical situation and higher energy prices have created uncertainty in the investors’ mind. Our valuation was at a premium to peers. Most investors are sitting on profits in India, unlike other markets. There was some excess in micro caps and mini caps, which needed a correction. In the last few months, we had seen “kachra” stocks outperforming quality. Donkeys can outperform horses for a while, but not for a long. We believe every correction is a great opportunity to buy into the “quality at reasonable price “ portfolio for long-term investors. Keep doing your SIP. Take advantage of the correction and add to your equity portfolio.”

Mukesh Kochar, National Head of Wealth at AUM Capital said, “The market was looking for some reason to correct as the valuation was not comfortable and, finally, that correction happened. The main reason for the correction can be attributed to the worsening geo-political tensions, rising US yields and profit-booking before the upcoming election. FIIs have also increased their pace of selling, and that might continue in the short-term. Long-term investors do not need to do much and the only thing they can do is to add on dips and stay with quality. The market may look reasonable in terms of the valuation if it corrects 300-400 points more from here, and geo-political risk stablises, although no one can predict the top or bottom in the short term.”

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