Global factors ensured that Indian equity markets opened low and continued to tank through the day. Though it was one of the biggest single day falls in absolute terms as benchmarks slipped almost six percent, the silver lining is that India is better off compared to emerging market countries and there are no apparent domestic factors involved. Such was the selling pressure – and, indeed, lack of buying – that all sectoral indices ended deep in red.
After the recent sell-off of last three sessions, the downside seems capped in Nifty as it has multiple supports around 7600 level. However, selling pressure may continue on the stock specific front especially in the midcap and smallcap space as they were hovering around their highs. Ideally, traders should focus on comparatively less volatile counters from the defensive pack and wait for the panic selling to stabilize. Investors can now get quality stocks at bargain prices. For those not fazed by temporary volatility, it is an excellent opportunity to gradually add quality stocks with medium to long term view