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We have had oil going down that has been a big boost for the markets. Overall another good news is that the Atlanta Fed projection for the US for quarter three is now running at 2.5% of year on year growth in GDP. So after two quarters of negative print we are going to see a pretty strong quarter for the US economy that gives substance to the markets.

Inflation looks to be the mega-trend for the first half of the 2020s and crude oil is one of the best natural hedges out there. Russia’s invasion of Ukraine and a lack of investment in new oilfields over the past five years have hit supplies, leading to stagnant production profiles everywhere from OPEC to US shale.

"These are great times for investors who have weathered the correction which took place over the past few months and now the next few weeks and months look quite interesting," he added. "I see a lot of reversion to mean and maybe the indices can cross the previous highs."

But that also does not mean that we start buying immediately on the first day of a sharp correction. We have to find out the points where the market will get into an equilibrium phase which means when the selling abates and when we will see good emergence of buying coming across into the market internals.

Hedge funds that make both bullish and bearish equity bets pretty much stopped purchasing shares to return to lenders this week after previously doing it at the fastest pace in more than two years, data from JPMorgan Chase & Co.’s prime broker unit show.

Regarding mutual funds, some funds, especially passive funds tracking an index, may have 100-150 stocks in the portfolio, leading to over-diversification and suboptimal returns. Concerning this factor, a stock portfolio may fare better.

The pressure to figure it out soon is high after a $7 trillion rally broke out in the middle of the Federal Reserve’s stiffest rate-hiking campaign in a generation. Feeding arguments to let stock bets ride are solid earnings and chart patterns suggesting the gains may last, including the S&P 500 erasing half its bear-market losses, a feat with an improbably sound record of success.

On expectations from the market, he said when returns reach extremes, they can revert to even lower than base rates. “The same is applicable for valuations as after a point of time valuations make a difference! Don’t expect returns of CY20 and CY21 every year,” Bhasin said, adding that sectors which witnessed heightened participation on narrative pretext can form valuation excesses as witnessed in tech stocks, especially categorised as new-age stocks in CY22.

"The RBI took its third rate hike to bring the repo-rate to 5.4%; however, it sounded a little less hawkish. With the softening of commodity prices and crude more specifically, we believe peak inflation might just be behind us."

The Q1FY23 earnings were keenly awaited as it was the first quarter post Covid world. The quarter gone by was resilient and despite global challenges, it was able to stand its ground.