A day after Tokyo's market led to a significant decline across Asian and European equities on Monday, causing benchmark indices like Nifty and Sensex to fall more than 2.5 per cent, Edelweiss Mutual Funds CEO Radhika Gupta referred to the downturn as a stock market correction rather than a crash.
In an Instagram post, Gupta advised investors to avoid panic and not to "dread the red" but rather to focus on making necessary adjustments. "I always say it's called correction not crash, because correction corrects our behaviour and it corrects our expectations. Corrections are a part of the journey of investing. So hold tight and stay invested," Gupta explained.
Highlighting the importance of maintaining composure, Gupta noted that corrections are a regular occurrence in the market, drawing from her 20 years of experience through numerous crises.
When asked whether investors should divest from all mid and small-cap stocks, the head of Edelweiss Mutual Funds advised against it. She stated, "No, even if you make asset allocation mistakes and not all mid and small caps are mistakes, this is not the time to fix them. Let things calm down and you will have time to review your mistakes, but a storm is not the time to review your mistakes."
She also advised against making additional equity purchases out of panic. "I always say that don't take too much action when you are in a panic. If you're comfortable, you can always buy more equities but don't feel the need to take a lot of action in any difficult situation," Gupta said.
On Tuesday, Indian benchmark indices ended the highly volatile session slightly lower, with the Nifty falling below 24,000. At the close, the Sensex was down by 125.84 points, or 0.16 per cent, at 78,633.56, while the Nifty dropped by 63.05 points, or 0.26 per cent, to 23,992.55.
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