The Indian equity market is being dragged into the global turmoil and there is little end in sight as the Union Budget is unlikely to be a meaningful catalyst for the markets, says a Bank of America Merrill Lynch (BofA-ML) report.
The findings of the report came a day after the benchmark Sensex crashed 807 points to drop below 23,000-mark yesterday. The index closed 34 points higher at 22,986 today.
Referring to the ongoing correction, the global financial services firm said Indian market is being dragged into the global turmoil.
"While it is most likely impossible to catch the bottom, we believe the ongoing correction provides a good opportunity to add equity in India," BofA-ML said in a research note.
There is heightened anticipation in the market for the Budget 2016-17, as the external environment is weak and corporate earnings growth is muted.
"In our view, the Budget for 2016 is unlikely to be a meaningful catalyst for the markets," the report said, adding that the limited spending headroom and the imperative to support the rural economy means the Budget is unlikely to provide any substantial boost to economy.
Meanwhile, Asian markets ended weak yesterday following US Federal Reserve Janet Yellen's testimony which suggested that the bank is likely to continue on the gradual rate hike path.
European shares were also lower with indices in France, Germany and the UK staring at losses of up to 4 per cent as global sell-off intensified.
Finance Minister Arun Jaitley today said there was no need for "exaggerated panic" and investors should keep the economy's inherent strength in mind while investing.
The minister said major sell-off in global markets created a chain reaction impacting the markets world over including in India.