New Delhi, Mar 14 (IANS): The Nifty Smallcap index is down 13.5 per cent and the midcap index is down 6.8 per cent from their respective peaks, but the Nifty is stable with a minor cut of only 2.1 per cent, says V. K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services.

"The lesson from market history is that frothy valuations are unsustainable. Therefore, the blood bath in the broader market which happened yesterday is hardly surprising to sane minds in the industry," he said.

There is room for the broader market to correct more since the valuations continue to be elevated. Investors should now focus on largecaps and quality midcaps. The turbulence in the market will give cherry picking opportunities, he said.

"From now on irrational exuberance will take a back seat and rational valuations and quality will be the driving force. This turbulence will separate the men from the boys," he added.

High quality private sector banks and the leading names in capital goods, telecom and autos can be accumulated in a calibrated manner. It is important to understand that India’s macro fundamentals continue to be good and the bull market is intact, he added.

BSE Sensex is trading at 72,935.92 points, up 174.03 on Thursday. Infosys, M&M, Wipro, L&T are up more than 1 per cent.