That said, from an investment point of view, we advise buying shares in the range of 7,000 and 10,000 levels for Nifty. At 10,000, investors are advised to buy 5 per cent; at 9,500, they should buy 10 per cent, increase it to 15 per cent when Nifty is at the 9,000 level, and then keep adding gradually at lower levels.
Among sectors, insurance and pharma stocks look promising. As regards pharma, things are turning positive for the sector structurally, too. The US FDA issues are fading, healthcare spending as part of gross domestic product (GDP) is expected to go up for most countries. And generics will play an important role. Hence, these factors are likely to drive pharma stocks.
Between large-caps and midcaps, retail investors are advised to go for large-caps, since they have already witnessed a steep correction. It doesn't make sense for investors to buy mid-caps directly. It is advisable that they invest in multi-cap funds, which invest in large-cap stocks and also put part of the money in midcap and small-cap companies. That would be the ideal market strategy for retail investors in order to have an exposure to small and mid-caps.
(As told to Swati Verma)
Abhimanyu Sofat is the head of research at IIFL securities