The tug of war between the bulls and bears continued with the latter securing April 1 session dragging benchmark indices down 4 percent.
The market is struggling to factor in the potential implications of COVID-19 which has created an environment of uncertainty.
"The uncertainty is very large. Unless COVID-19 things settle down in the US, the market may not settle down. We are part of global financial system," Sanjay Dutt of Quantum Securities told CNBC-TV18.
"If we look back and see, FIIs bought over Rs 300 crore on Friday then there was 10 times more selling in following days in cash markets which is unpredictable and that is why we don't know which way the flow will go," he said.
FIIs sold more than Rs 7,300 crore worth of shares on March 30-31 after Rs 354 crore buying on March 27. Their total selling was Rs 65,816 crore in March 2020, the biggest ever in a single month.
"We are part of the global cycle. Even if we don't incur much damage from COVID-19, we will be a part of collateral damage," Sanjay Dutt said.
He feels the liquidity is very low in the market right now. Recently analyst from Nomura said that one does not know about the impact of COVID-19 on earnings. Hence, the market may be trading at historically low valuations on an earnings basis, he feels.
"We can't figure out the impact of COVID-19 on earnings and we also don't know whether the lockdown will end on April 14 or not. Uncertainty is too high now. Generally in this kind of situation, equities tend to breakdown," Dutt said.
Hence like other experts, he also advised that one should sit on the sidelines and don't redeem mutual funds. "Don't be brave to put lump sum money in equities even though valuations are attractive."
He said, "Compelling sectors like healthcare, consumption, life insurance where you see lofty valuations, you may want to allocate some more money, but the broad call is to be on the sidelines, let the Dow Jones settles down."
"As soon as the cases and deaths in the US come down dramatically there could be stability in the equity market. But right now no one is looking at emerging markets, there the risk of currency also exists. We are in the middle of complete mess in equity, bonds, currency, commodities. We need to stand out and watch now," he added.
Globally markets corrected in the range of 20-30 percent in current turmoil while the Indian equities plunged more than 33 percent.Disclaimer: The views and investment tips expressed by investment expert on Moneycontrol.com are his own and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.