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Foreign institutional investors (FIIs) are selling heavily and taking their
funds out of emerging markets, including the domestic markets. The markets
here have fallen quite significantly (around 50 percent) from their peak
levels. Many blue-chip stocks have corrected 60 to 80 percent during this
market crash.

Stocks and sectors that led the market rally during the last few years are
among the worst-hit in this correction. For example stocks in
infrastructure, banking, financial services, aviation, and information
technology have seen much deeper drops than key market indices. Many
investors are stuck in these stocks at higher levels. Investors are not sure
whether they should sell at these levels or buy more to average out their
purchase price.

Here are some points to help investors take a decision:

Stay invested

Markets have already crashed by around 30 percent in the last one month or
so. Many blue-chip stocks are trading at their yearly or all-time lows.
Nobody can rule out further slides of 10 to 15 percent but the possibility
of sharp falls from these levels is quite remote.

Equity analysts believe that the domestic markets are better placed in this
global crisis and therefore they will bounce back in the medium to long
term. Domestic companies don't have significant exposure to the US sub-prime
crisis and export contributions to the GDP are also not very high. The GDP
is expected to grow in the range of 6.5 to eight percent in the coming
years. Therefore, those invested in blue-chip or fundamentally-strong
mid-caps should not panic in the current market conditions and hold on to
their positions.


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