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BSE Sensex is down 700 points in morning trade on Thursday led by a slump in Tech Mahindra.

BSE Sensex was trading at 70,331.85 points, down by 728.46 points or 1.03 per cent.

Tech Mahindra plunged more than 5 per cent on weak quarterly results. Axis Bank, Sun Pharma are down more than 2 per cent.

V.K. Vijayakumar, Chief Investment Strategist, Geojit Financial Services said since the tug of war between the FIIs and DIIs continues, volatility will remain high in the near-term. This volatility may be used by investors to churn their portfolios.

A significant anomaly in the market is the high valuation in some pockets and the fair and even attractive valuation in some other pockets. For instance, some PSU stocks are flying high on hopes based on order flows. It will take a long time for these order flows like in ship building, for instance, to translate into profits. And there is no guarantee that it will happen. On the other hand pockets like banking are fairly valued and the performance and prospects are good. There is value in bluechips like HDFC Bank, he said.

The rising bond yields in the US is a matter of concern. This rally in global stock markets was triggered by the Fed pivot which saw the 10-year bond yield falling from 5 per cent to around 3.8 per cent. Now the 10-year is back at 4.18 per cent which indicates that the Fed rate cut will come only in H2 of 2024. A significant take away from the Q3 results is the improving margins of the auto industry, he added.