Mkt sell-off overdone; see flows coming back by Jan 3rd wk: Pros

Markets around the world opened on a disappointing note on the back of the Chinese PMI data and thereafter it only got exacerbated, says market expert Ajay Bagga. He, however, expects more intervention in China tomorrow.

Brenda Kelly, head analyst from London Capital Group, on the other hand says the Chinese slowdown is not a new surprise for global markets and going ahead, more bad news can come out of China. She also sees further economic slowdown there. However, she sees a small bounce in Chinese equities in the coming days.

Coming back to India, Bagga says the sell-off in the market today was not warranted and is overdone. "India continues to remain relatively one of the best markets to invest in and has one of the best macros," he told CNBC-TV18. He advises investors to invest in themes such as consumption, private sector banks with large retail portfolios, auto, IT, pharma and FMCG, among others.

It was not just a bad day for equities, but the rupee too followed suit. The Indian rupee lost sharply on the back of the Chinese rout and tensions in  middle-east. It settled down by over 47 paise at the 66.61 per dollar level. But NS Vyankatesh of IDBI Bank says it was ust a kneejerk reaction to the way the equity market panned out today. "Indian economy is in a much better shape. Fx reserves are fine, macro indicators too are fine," he explains. He does not see any reason why the rupee should continue to depreciate going ahead.