Many market veterans believe they have not seen such capitulation in their lifetime. While the indices are holding up at 37,000 points thanks to HDFC, HDFC Bank, TCS, Infosys and Reliance, the broader markets have virtually collapsed.

Even index stocks have been badly battered. Two years ago, if you told even an astute investor you would get the stock of Tata Motors at Rs 120 or Yes Bank at Rs 59, he or she would not believe. Today, the reality is that everything has collapsed. Shares of Coal India, for example has never hit a price of Rs 178, ever since it listed.

Dividend stocks look great

Some stocks are now offering dividends that give you similar yields like banks. IndiaBulls Housing is offering dividend yields of near 7 per cent and so is the case with Coal India. Karnataka Bank, NMDC, Vedanta are all stocks that offer excellent dividend yields. To be honest, we see limited downside in stocks from these levels, given the way they have been battered. Who would want to sell stocks at these levels is the question.

Global cues hold the key

Global cues would remain key for market movement in the coming days. It's highly possible that the trade tariff war between China and the US could escalate even further.

Even if this leads to some global slowdown, it is unlikely to impact India a great deal. India, remember is a domestic consumption story and is relatively insulated from global developments.

Having said that there could be some impact, but, nothing worrisome.

Demand to revive

At some stage we will see a revival in demand. The most interesting thing about the present Finance Minister, is that she heard industry and investors and made changes. Finance Minister, Nirmala Sitharaman almost delivered a mini-budget in a desire to push growth. One of the key measures was to release money stuck in arbitration awards. This we believe would help cash strapped construction industry, which in turn could help push growth.

The government is also likely to announce some more measures for the construction and real estate industry, which could propel growth.

A good time to buy is now

You do not get good prices and good news simultaneously. You either get good news or good prices. At the moment, prices are good, which means the news is bad.

Probably 2-3 years from now, we are unlikely to see prices of stocks where they are now. For the next few weeks, we may continue to see some selling pressure from Foreign Portfolio Investors wane. They have net sold almost every single trading day since the Union Budget on July 5, while domestic investors have been net buyers almost every single day since the Union Budget. The trend is unlikely to reverse at least immediately, given the global scenario.

While worries over a recession may be far-fetched at the moment, there is a high possibility of a slowdown across the globe. While this may push indices lower, those looking from a 2-3 year perspective, markets offer an excellent opportunity for long-term investors.

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