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Three trends stand out in current Nifty correction, says analyst. What investors should do

Stock market update: At 11 am, Nifty was down 0.75% at 16,120 while Sensex was down 400 points (Utpal Sarkar)

He also points to other two trends standing out in the current correction phase: “Large-caps are outperforming mid-and small-caps: Small-cap and Mid-cap indices are down 24% and 17% respectively from the peak while Nifty is down only 13%. And value is outperforming growth."

Sustained buying by DIIs and retail investors, Mr Vijayakumar says, is imparting some resilience to the market even when FPIs continue to be in the sell mode. but an unhealthy trend in the market is retail investors chasing low-grade cheap stocks.

His advice for retail investors: “The only sensible strategy in this highly volatile environment is to buy small quantities of high quality stocks for the long-term and refrain from speculation."

At 11 am, Nifty was down 0.75% at 16,120 as global equity markets were cautious ahead of US inflation data. India's consumer price inflation data is due to be released tomorrow. Foreign investors have sold Indian equities worth $1.82 billion so far this month, shedding stocks worth $374 million in the fourth straight day of net selling on Tuesday, Refinitiv data showed.

Ajit Mishra, VP - Research, Religare Broking, said: “We reiterate our bearish stance on the markets, in absence of any positive trigger. Meanwhile, since most of the sectors are trading under pressure, the focus should be on stock selection."

Nifty Technical Outlook

Technically, Nifty’s interweek support is seen only at 15,901 mark and below the same expect a waterfall of selling towards 15200-15250 mark, says Prashanth Tapse, Vice President (Research), Mehta Equities Ltd.

“FIIs have continued with their exit strategy and sold shares worth 3,960.59 crores on Tuesday. The rising interest rate scenario across key nations have raised concerns of a fragile economic growth going ahead."