Strong domestic investor appetite likely to buffer market from steep dips, says Ashwini Agarwal

Ashwini Agarwal, Founder and Partner at Demeter Advisors believes that all the elements needed for a sharp market correction are in place at the moment. However, as long as there is no imminent risk to the domestic investor appetite, the possibility of a sharp sell-off is highly unlikely.

"There are all the elements in place for a sharper correction but whether it will happen totally depends on domestic investor sentiment. There are currently robust fund inflows, whether through mutual funds or directly," he told CNBC-TV18.

In the financials space, he holds the view that there is currently no immediate cause for concern with respect to banks' earnings. However, the rising proportion of unsecured loans could be a worry at some point if the economy slows down.

He said he preferred indirectly investing in the real estate sector through proxy players, such as plywood, tiles, fittings, or even construction materials like wood and cement.

“Directly buying real estate companies is always fraught with some amount of project-related risks, which I like to personally steer away from,” he said.