Suveer Chainani, executive director - client relations at Avendus Wealth Management is of the view that one must remember that volatility is the price you pay for equity as an asset class for longer-term returns and so one should not be too perturbed with the market correction.
He said one should play on domestic cyclicals ex-of banks. Under domestic cyclicals, one can look at real estate, led by manufacturing, capital goods, and infrastructure. These areas look exciting but anything expensive that is anything above 30-40 times, one should be wary of because interest rates and PE multiples are very tightly related. It is a matter of time that interest rate normalisation does happen and in some of the countries, they have already started and there is talk that in India also the normalisation would start.
"So be wary of anything which is expensive and that rules out buy high quality at any price. That is something one should be cautious about," said Chainani.
He said COVID-19 was a bear argument when it began, but became a bull argument later due to central bank actions globally.
Indian equity benchmarks Sensex and Nifty50 suffered sharp losses on Friday tracking a sell-off across global markets amid concerns about a new COVID variant. Barring pharmaceutical shares, all sectors were deep in the red. Broader markets also tumbled, with the midcap and smallcap indices falling around two percent each.