Stock Market View: Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services

At elevated valuations the market needs only a trigger for a sell-off and yesterday this trigger came in the form of HDFC Bank’s worse-than-expected results. It is also important to understand that there was a sell-off in other emerging markets like Taiwan and Korea indicating that this is an emerging market correction driven by FPI outflows. The FPI sell figures in India yesterday was huge at Rs 10578 crores. In the context of rising bond yields in the US, FPIs may sell again. But this is likely to be countered by DII buying in fairly valued large caps with growth potential.

Investors may wait and watch for this turbulence to subside. The resilience in IT stocks in this crash is an indication of the strength of the sector. Apart from IT, large caps like RIL, ICICI Bank, L&T and Bharti have strength to tide over this turbulence.

Further dips in HDFC Bank will provide buying opportunities for long-term investors.