The next stop for Nifty is 10,500 on the downside, said Andrew Holland, CEO, Avendus Capital Alternate Strategies, adding that there seems to be no support from the global economic data.

Holland is of the view that it would be better to look at individual stocks.

According to him, the US retail data indicates that the economy is in recession, Germany is next and Italy and UK are also there.

He does not believe the worst is over for the auto companies. "They were enjoying double-digit growth and now they are not and that is going to have to reverse in terms of operational gearing. So, now the companies will start spending more on advertising, giving more discounts, reduce prices and there would be a price war, which would impact their margins," said Holland.

"The market has not taken this into account yet. One should expect a 15-20 percent decline in profitability for most of the auto stocks," he added.

With regards to financials, he said he still likes the private banks. "The interesting thing is that there is new management coming in for most of the banks and that could change the pecking order over next few years and give us opportunities to pick some winners from that. As of now, the house is tracking new management at Yes Bank and Axis Bank before taking a call on the banks," he said.