Domestic Inflows Helped Indices Hold Gains, Says ASK Hedge's Vaibhav Sanghavi

Whenever interest rates rise sharply or remain elevated, there is an impact on the economy and subsequently on the corporate earnings as well, Sanghavi said. However, if yields stabilise and potentially move downwards, it would be better for equities, he said.

The Sensex and Nifty fell more than 1% on Thursday, adding to the loss of Rs 14.6 lakh crore over the previous five sessions. In all, the BSE indices fell 4.94% in the last six sessions and NSE Nifty 50 dropped 4.82%, according to Bloomberg data.

The geopolitical tension is affecting the global economy. High market valuations are making things complicated, Sanghavi said.

It's not just these factors. Global monetary policies and their corresponding interest rates are also significant factors contributing to the intricate web of challenges faced by the global economy, he said.

"As always seen that during the fall and post the falls, while the markets are ready to be invested in, we have seen actual outflows happening during those periods..." he said.

According to him, while it is said that investors should invest in the cheaper levels of the market, human behaviour often works in the opposite way. People actually redeem purely because the amount of negative news during the period is at peak and people get too carried away and exit or trim their portfolios, he said.

"That is where you have your hedges kind of come in, give you that comfort on the portfolio, reduce your correlation, and give you ammunition to kind of go and invest during those kind of times."