Sensex tanks:Correction was overdue;“buy on dips” allocation strategy may be followed

At one point, the BSE Sensex was down over 1,800 points while Nifty50 plunged to the sub-17,000 levels. Midcap and smallcap indices were down up to 2.8 per cent. Fear gauge India VIX soared 24.84 per cent to 20.80.

Data available with depository NSDL showed foreign portfolio investors were net sellers to the tune of Rs 14,800 crore in the last three sessions, which has dragged down monthly inflows figure to Rs 1,573 crore. FPIs sold Rs 13,550 crore worth of equities in October.

Gold, another safe haven, rose 0.6 per cent to $1,798.20 per ounce in international market.

Investment guru Jim Rogers, however, believes that central banks globally would come to the market rescue if things go downhill from here on.

Gold, another safe haven, rose 0.6 per cent to $1,798.20 per ounce in international market.

Investment guru Jim Rogers, however, believes that central banks globally would come to the market rescue if things go downhill from here on.

Rogers said when things start shaking for a while, central bankers panic and they would do anything they can to save the bubble, save the bull market and prosperity.

In an interview Rogers said stocks like Amazon and Google are wildly expensive in the US market. He said stocks such as Samsung and certain Japanese stocks go up every day and could be in a bubble, but not everything.

"I am not selling yet because I can see there are a lot of stocks that have still not skyrocketed. When everything skyrockets, then you know we are very close to the top," Rogers said.

ICICIDirect in a research note this week suggested that a correction was overdue and should be construed as healthy in the overall larger uptrend.It noted that the market has seen correction of 10-15 per cent almost every year historically. It noted that a 5 per cent correction is generally good enough “dip” to follow the time and tested “buy on dips” allocation strategy.

Investors may, therefore, allocate some lumpsum amount at current levels apart from their regular SIPs, it said.