The spotlight of the market now shifts to the winter session of Parliament which begins on November 26. Market participants would be watching the progress on crucial pending legislative bills like GST (Goods and Services Tax), bankruptcy code and land acquisition.
UR Bhat, MD of Dalton Capital, said markets are not expecting much from the winter session.
"The September quarter results were worse than what was initially expected. A rate hike is probably coming up in the US. The data coming out from China is not very encouraging. A Parliament session where nothing much is expected... But all these things are factored into prices today," he said. (Watch full interview)
Otherwise, markets may remain flat with downward bias, he added.
Even at current levels, the market valuation does not look cheap, Mr Bhat said. "People are still downgrading FY16 earnings growth. And there is still rethink on FY17 earnings growth numbers."
On the overall economy, he however sees an early stage of a turnaround but feels that higher government spending will take time to show up in terms of economic performance. "I think right steps are being taken. As long as markets feel that right steps are being taken and there would be results two to three quarters from now, markets may trade at these levels, unless there is some disruption," he added.
Mr Bhat believes that equities offer "good opportunity to make good money over next couple of years".
"Conditions have been created for future economic growth. The government is doing the bulk of the investments. And the private sector will follow once there is some pick up in economy."
It is not the time to bid goodbye to equities, he added.
At the current juncture, he likes private banks, auto companies and select engineering companies. Pharma has also corrected a lot and it looks worthwhile investing in, he added.
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