Nilesh Shah, MD, Kotak Mahindra AMC is of the view that it is the nature of the market to correct and looks like a part and parcel of a normal market correction. According to him, a mid-double digit correction could be likely. However, this is a healthy correction and will provide an opportunity to invest in the market subject to the new COVID variant.

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He is also of the view that this correction is not a beginning of a deeper move like that of March 2020. Although there are concerns about the new COVID variant today, both the world healthcare system and the Indian healthcare systems are better equipped to handle this crisis, he said.

When asked if the correction seen in the banking sector would be a good opportunity to buy, Shah said, here onwards in the banking sector if you can pick up a bank, which is technologically savvy, which is owning the customer, and expanding the credit book without creating potential future NPAs then you have a winner.

Renewed fears on a new COVID variant saw the markets tumble on Friday. Nifty and Sensex recorded their biggest single-day falls since early April. Except for pharma, all sectoral indices ended in the red. BSE companies erased a market cap of over Rs 7 lakh crore on Friday alone. For the week, the market recorded their biggest weekly fall since January.

Meanwhile, Jai Bala of Cashthechaos.com is of the view that the market has seen a stellar move for several months and is likely to experience a bull market correction but it could be a very deep one.

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According to Bala, the Nifty should not have gone below 17,250 and a break of 17,250 signals that the market could drop even as deep as 15,500. However, the first checkpoint would be at about 16,750, which is an important support level but if the market breaks 16,750 then it could head to 15,500.

He said although giving a timeframe is difficult, 15,000 could come as quickly as in four weeks and if it were to come that quickly, the market could be in for a bigger drop.

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However, the positive for the market is that Reliance Industries is holding above Rs 2,274 and as long as Reliance can manage to hold above that, it can try to hold back the bearishness. On Thursday, Reliance climbed 6 percent and the rest of the market hardly contributed to the move.

According to him, the market has been struggling for the last few weeks because of weakness in HDFC, Axis Bank and while SBI was doing reasonably well, it seems to have also turned lower. So, banks are definitely an avoid.

"Moreover, FMCG is also exhibiting weakness. Also, we don't want the metals index to drop below 5,200. So, these are the important sectors to watch out for," said Bala.

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(Edited by : Thomas Abraham)

First Published:Nov 26, 2021 6:03 PM IST