Not investing right now could be against the theory of investing, says Motilal Oswal Financial Services

The events, which are deciding the flow of the markets are right now beyond our purview, he said, adding that any investor who has been looking to deploy money then we are at a phase where not deploying at this point of time goes against the theory of investing. "One has to invest a significant part of their money into equities and basically,  have some more ammunition left in case the market goes down further, so that they can participate again," he said in an interview with CNBC-TV18.

When asked about the continuous selling in banking sector, he replied, “We are continuing to see selling at higher levels. Last week we had a coordinated recovery where globally most of the markets saw some recovery from their lows. However, this still a market where the events that are  happening around us do not give confidence to the investors to buy."

The moment you saw the Nifty recovering closer to 9,000 and stimulus packages being announced, there was next round of selling and we were 600-700 points down -- specifically, the banks and financials because they were the ones, which have dominated the portfolios for the last many years in every investors' allocation, more so in the offshore allocation as well.

"This whole market has been a result of the massive FII outflows. So it is fair to assume that whatever FII selling number you see right now, at least half of them, would be dominated by financials and within financials, the private lenders are the ones, which they have been owned the most,” he said.

According to him, the market right now is not looking at anything on an annualized basis. The kind of events or fear psychosis that the markets are going through – a year looks like a much longer period to make any prediction although that should be the right way.

"The two important changes that we are seeing and which has an impact on financials, first is the debate around gross domestic product (GDP) has moved away from growth to how much decline countries can see over the next six months, and the debate around interest rates have shifted from whether they should be positive in real to a discussion on whether they can be zero or how much closer to zero on nominal terms," said Rajgarhia.

These two things have their own impact on financials because financials generally thrive whenever you have a reasonable GDP growth and rates, which supports that GDP growth but both of these things are right now under serious stress, he added. As a result you are also seeing that people are uncertain in the very near-term about what kind of impact or damage one would see.

"I would think that some of this, for some of the well-run financial franchises will be short-term and the price falls that we are seeing is a lot more than what the franchise valuation would demand but the markets always tend to overdo both on the upside and the downside,” he further mentioned.

“Some of the well-run financial franchises will come out relatively better from this entire phase of next one quarter and these are the prices, which are very attractive for investors to look at them,” he stated