While the Sensex and the Nifty have not really seen a dramatic decline, they have shed ground for eight consecutive days, in which the benchmark indices have lost nearly 4 per cent. This time round, the fall has largely been on account of heavyweights like TCS, Infosys and Reliance, which have seen some profit booking. If you observe the broader markets you will see significant erosion.

For example, stocks like Graphite India, which at one time was trading as high as Rs 1,100 is down to Rs 408. The stock gives a dividend yield of 4 per cent.

Another favorite of analysts was Avanti Feeds. The stock has come crashing down from Rs 841 to Rs 304. There are many such stocks, which were once commanding premium valuations, but have seen a swift reaction. These include stocks like HEG, Balkrishna Industries, Bharat Forge, Motherson Sumi etc., which have seen substantial fall in their stock prices.

In fact, the broader markets have seen such large falls, it seems the Sensex is trading near 30,000 levels. Stocks like MRF, Bajaj Electricals, Arvind, and Uflex were among the 331 stocks that hit 52-week lows on BSE on Tuesday. The stocks falling to 52-week lows is really significant.

There is no doubt significant value in the broader markets. The problems right now is that investors are not willing to take bets and are prepared to sell into every rally. Some stocks are trading at just 6-7 times, p/e earnings multiples.A cautious policy is being adopted ahead of the General Elections due in May, where things are looking a lot more uncertain than a year ago.

The only class of investors that are currently buying into stocks are the mutual funds. Retail investors and Foreign Portfolio Investors have sold heavily into stocks. In fact, even inflows into mutual funds has been slowing. It will be interesting to see how far inflows into mutual funds sustain.

Already, the returns from most funds for the last one year have been negative. If it continues stay that way, it might test the patience of investors and the markets.