"Sometimes the best thing is to do nothing": Mihir Vora's suggestion for retail investors on market sell-off

Mihir Vora, Director and Chief Investment Officer at Max Life Insurance (File picture)

Amid global risk aversion due to geopolitical tensions arising out of the Russia-Ukraine war, almost over Rs 40,000 crore has been pulled out of the Indian markets on March 7.  Bears tightened their grip over Dalal Street during the day, wiping out nearly Rs 29 lakh crore of investors' wealth since the beginning of February.

Foreign institutional investors (FIIs) have already sold about Rs 18,000 crore since the start of March 2022. Amid this sell-off, Mihir Vora, Director and Chief Investment Officer at Max Life Insurance, suggests long-term retail investors that sometimes, the best thing to do, is to do nothing.

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''Things are moving fast and you never know when the situation can turn the other way. While the situation is grim and there is no good news as of now, we also need to keep in mind that the stock prices have also moved quite rapidly,'' Vohra said in an exclusive interview with CNBC TV-18 .

''The Nifty is down 10-12 percent and there has been a wider correction in the markets over the last three-four months, even though it may not appear obvious at the broader index-level,'' he added.

Also Read: Russian assault on Ukraine rattles markets, Indian investors lose Rs 29 lakh crore since February

Comparing the current situation to March 2020, Vora explains that this year, the market scenario is different. Unlike march 2020 - when it was quite clear that IT, pharma indices would do well because of good tech spending and the COVID-19 wave requiring more pharmaceutical supply, this time it is more of a supply-side commodity shock, according to Vora.

''Once this reverses -which it has to at some point of time, the Indian economy should do better in the domestic sector. So, the strategy should be a bit different than what it was a couple of years back, '' said Vora.

''However, if you have a bit of cash to deploy, you can start nibbling in a bit,'' he added.

At 3:00 pm, Sensex was down 1,548.98 points or 2.85 percent at 52784.83, and the Nifty dipped 404.40 points or 2.49 percent at 15841.

The Nifty MidCap100 and Nifty SmallCap 100 indices entered bear market territory this morning as indices opened lower again, driven down by global markets.

Also Read: Nifty MidCap100, SmallCap100 turns in bear territory; falls over 20% from high

A bear market is confirmed when an index sinks 20 percent or more below its most recent closing high. The Sensex and Nifty have declined almost 15 percent from those peak levels.

The fall was after news reports suggested that the US and its European allies were considering a ban on Russian oil. Brent crude rose above $130 per barrel in early trade, the most since 2008.