The markets opened on a weak note with the Sensex down 401 points at 14,734 and Nifty down 125 points at 4276 inline with global cues. The Dow Jones fell 281.18 points to 13,182.15 on Friday after the US government said jobs growth was not as strong as expected in the last month and reports that the services sector grew at a much slower pace than expected in July. Sub-prime mortgage concerns also played on investor sentiments after Standard & Poor's Ratings Services lowered its credit outlook on Bear Stearns to negative from stable because of the investment bank's exposure to the distressed mortgage and corporate buyout markets. Asian markets are also trading in the red but are showing signs of recovery.

The Sensex is currently trading at 14859.41 down 278.99 points while the Nifty is down 80.80 points at 4320.75. In these volatile times what should investors do?

Portfolio Manager P N Vijay feels that until this volatility subsides, serious investments are not possible. “This volatility is driven by market internals and unless they pan themselves out, serious investment is not possible,” he added.

He does not expect the volatility to continue for a long time. “The volatility will be there as long as the exchange authorities take a blind eye and do nothing about the hugely leveraged market that we have. The market will continue to earn a bad name for being highly volatile and be called a casino or whatever. We have to live with this volatility in India. I don’t feel it will continue for a longtime because now the points are clear going up to March 2008. Economic growth with the monsoon and pick-up in rural demand is on par, so we are talking about 8.5-9% and inflation between 4.5-5%. Corporate results have shown an above 30% growth. There is nothing that can put a reversal on this bull market but only god knows when this volatility will end,” he added.

On whether investors should start buying blue chips or let this volatility settle, Vijay said, “It’s almost impossible to hit the bottom in any market, but with this type of fall the blue chips are getting attractive, not on a one year’s time span but on a four-five years time span. The way they have fallen in these past three days of melting may be a good time to get into blue chips at these beaten down levels. If one is in cash right now never try to hit the bottom but this looks somewhere close to it.”

Soumendra Nath Lahiri of DSP ML AMC feels that this an opportunity for investors to but stocks, which have posted numbers much better than expected in the last quarter or so.

On whether there will be a deeper correction in the markets, Lahiri said, “We believe that the markets will consolidate and correct for some time before the next uptick. Last quarter was a challenging quarter for most corporate and we have done a good set of numbers. If the numbers follow in the corresponding quarters, one would see interest level again coming back. We are taking a beating along with other global markets since we are aligned today, but if numbers turn out to be positive, one will see interest level increasing in India.”

Technical Analyst Ashwani Gujral feels that investors should currently buy with a horizon of 5-6 months. “4,250 to 4,300 have been a consolidation zone. We have spent a lot of time here, so this is some sort of a support. A highly leveraged market like ours can easily go an extra 5% and then turn around. At present, it’s time to probably buy in cash. Keep your leverage low in terms of the Nifty. If you have Rs 40 lakh in capital just buy a 1,000 Nifty, so in a sense you are buying Nifty in cash. Don’t increase your leverage. The Nifty could easily go to 4,100 and then turn. It all depends on global cues. This is a serious buying opportunity, if you look at it from a 5-6 months point of view,” he added.