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"Increasing concerns over re-emergence of Covid in some parts of the world and recession worries in the US have been keeping FPIs away from emerging markets like India," Himanshu Srivastava, Associate Director - Manager Research at Morningstar India, said.

Global brokerage Nomura prefers largecaps over midcaps in the IT pack in the current environment, as it believes earnings risks are material in midcaps in a slowing demand outlook. In largecaps, its top buy idea is Infosys while it has a reduce call on TCS. Emkay Global, on the other hand, has a buy call on Infosys and Hold on TCS. ICICIDirect lists Infosys as its top pick from the sector.

The valuation of Tata Consultancy Services (TCS) eroded by Rs 17,289.02 crore to Rs 11,75,287.30 crore and that of ICICI Bank diminished by Rs 14,447.69 crore to Rs 6,07,140.65 crore.

"The index is already trading in oversold territory so a pullback cannot be ruled out from the current level. The undertone remains bearish as long as the Nifty stays below 18,200 and BankNifty below the 43,000 mark. Since the markets have already witnessed a sharp correction a pullback rally can be deployed from the current levels."

Gold prices changed little in the international markets last year. Despite the geopolitical crisis and recession fears reigniting its safe-haven demand in the first quarter, a strong US dollar had cast shadows on the prospects of the yellow metal for the rest of the year.

Ahead of the Union Budget on February 1, the market is expected to maintain a cautious stance. "The stock market trend has started to be impacted by the view and in anticipation of the heavy economic data, Fed policy, India Q3 results and Union Budget expectations," said Vinod Nair, Head of Research at Geojit Financial services.

"The Nifty50 index has been showing lower top formation patterns on the daily chart since the last one month which suggests a bearish biased view and with the onset of result season, one can anticipate for fluctuations and swings this month. Currently, the 17,780-17,800 levels would be crucial which if decisively broken can trigger for fresh sell-off, with next downside targets visible near the 17500 and 17250 (200-DMA levels) zone."

“I think every dip should be bought into – be it 5% or 7% because the risk reward is favourable. We have three large events next year. One is the HDFC Bank merger will be over; we will have Reliance which is significantly under owned and the reversal of flows, which is more inflows coming into India.”

Indian indices continued to trade with cuts on weak global cues. At the end of the first week of the new calendar year and ahead of the start of the earnings season, indices ended on a weak note, with Nifty failing to hold 18,000 levels. There was broad-based selling with all but the FMCG pack ending in the red.

While investors are off to a quick start in making back some of that money, the pace of this week’s bond rush shows that issuers are bracing for something that’s still very 2022: volatile markets where the opportunity to borrow can slam shut faster than you can say consumer price index.