Even the last Bull will think twice before buying in this market

It is going to be very difficult and testing time for retail investors.

Markets once again came under heavy selling pressure on Monday with the Sensex hitting the 10 per cent lower circuit as nothing helped to contain the extreme volatility and steep correction in the equities. Market regulator Securities and Exchange Board of India (Sebi) unveiled a slew of measures on Friday to tackle volatility but it was of no help as there has been a lockdown. This overall shutdown is creating panic in the minds of foreign institutional investors (FIIs), who continue to sell.

I don't know what kind of measures will help bring some sanity in the market because at these levels even the last bull would possibly think twice before deploying money. If someone was buying even three days ago, the present market is an opportunity to accumulate. That said, the key question is who would have the courage to buy in this type of market condition?  

It is going to be very difficult and a testing time for retail investors. If the selling pressure continues and there are hardly any buyers, the situation could worsen further. Volumes, too, are not encouraging.

For the time being, I think investors should sit on the sidelines and wait for some stability. Though if one is courageous enough, s/he can invest, but it would be a risky affair.

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Ambareesh Baliga is an independent market expert. Views are his own.

(As told to Swati Verma)