The relentless selloff in India may be influenced by the situation in China, where there are rumors of further attempts to support their domestic stock markets. Some foreign investors may be tempted to switch their investments from India to the oversold and cheap Chinese equities. Despite short-term pressure on the financial sector, it offers fantastic opportunities for medium- to long-term investors. IT and healthcare sectors, viewed as more defensive, have been strong performers. India still presents a good longer-term investment story, although there may be some money flowing into China if it outperforms.
The mammoth investment by institutional and retail investors has pushed up the benchmark Nifty by 20% and the key midcap and smallcap indices by 44% and 48% respectively
“Fortunately, in our funds and with our investors, we have kept a significant amount of cash in the portfolio. This kind of a correction brings up the opportunity to buy. We may not buy all at once, but selectively in some of the stocks, we would like to buy in this particular fall.”