It's been the highest ever single-day fall for the market. On Thursday the Sensex, at one stage was down by 886 points, only to finally close at 11391, down 826 points.
The last time the fall in the Sensex came close to this was almost two years back on May 17, 2004 when it had shed 562 points. At that time, the fall was more on the back of a panic set out by the voting out of the then NDA government.
Ever since, the Sensex has seen wild mood swings and it has been a crazy ride for the hard-core traders, leaving the average retail investor with a sense of bewilderment. So the next question is what should one do with their portfolio and how to protect it?
Mutual fund managers feel that earnings growth will continue and the Indian market will continue to do well. So, that should be a relief to your average Joe.
Fund managers are unperturbed by Thursday's fall and see it as a good investment opportunity.
Sandesh Kirkire, CEO, Kotak Mutual Fund said, "The fall is led by global concerns relating to rising interest rates, commodity prices, and taxation of short-term capital gains for FIIs. However, the India story remains intact and investors should use such corrections as investment opportunities."
Sashi Krishnan, CEO, Chola Mutual Fund said, "Today's is a large fall. Markets have moved up quite a bit in the past. And as we have been saying, the easy part is over. Earlier the rally was driven by strong earnings growth, but now valuations have caught up with earnings growth, hence corrections are necessary. However, we believe the earnings growth will continue and we see Indian market doing well. Investors should stay invested. Fresh investors can invest for a 4-5 years time frame."
Mihir Vora, Head - Equities, ABN AMRO Mutual Fund said, "Today's fall is a bit of concern. It was triggered by further weakening of global commodities and weakening of Indian Rupee. The markets were over bought and today lot of trading positions were unwound by locals and may be FIIs too. Stop losses and margin calls would have added to the correction. However, we don't see this correction as a change of trend so far, though the weakening rupee, and rising oil prices do remain key concern."
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