Talking to ET Now, Nischal Maheshwari, Head-Institutional Equities, Edelweiss Securities , says one major thing to watch out for is how the dollar behaves as in the last two days we have seen rupee fall quite a bit.

Edited excerpts:

What explains the selling? Do you think it was a mixture of both the way the currency was falling and some fresh murmurs on geopolitical tensions as well? Do you think in the next few days to come, we would see some aggravated selling?

The market was waiting for a reason to correct, it got a couple of reasons. One possibly was the rise in geopolitical tensions. One of the major things that has happened is the dollar strength. If you look at it basically, dollar versus the emerging market currencies has been depreciating for almost now 12 to 13 months.

It started January last year and has come a long way down. That was a big trade which has been driving not only the emerging market currencies but also all the metals. Everything has done very well in the last 12 to 15 months and that seems to be now coming to bottom basically.

A couple of days back, the Fed indicated that they are going to be now shrinking their balance sheet though it is not going to have a major impact for the moment. But I think, that is also a trend reversal as far as dollar weakness is concerned. So, one major thing to watch out for is how the dollar behaves and in the last two days we have seen rupee falling quite a bit. These are some of the factors which are now building up on the Indian market and our market is still not supported by strong earnings. All these issues saw people taking away some profit from the desk.

One was spoilt for choices if one was looking at investing in any IPO, relisting and trading those gains there. Anything in particular, that has caught your fancy? The fact is any IPO at whatever valuations it may come in, whatever business it may have seems to be finding buyers at all levels.

At the peak of the market frenzy, you will find offerings basically which are there but quite a few of them are fundamentally very good companies -- whether it is SBI Life or ICICI Lombard or even Prataap Snacks. These are a very strong set of companies. Obviously at these market levels, there is very little which gets left on the table when the promoters go out and do an issue. My favourite among the three is Prataap Snacks which has just got opened today.

One key trend that you would look out for personally next week?

I would still be tracking the macros. What has happened in the last one week is that among metals -- which have always been ahead of the market -- copper is down by almost 10% globally. We have seen some cool off happening in iron ore, steel though aluminium still continues to be strong.

I would be looking mostly on macros. Global macros is where my focus would be and again the geopolitical situation. These were the two things which I would look out for not only next week but also a couple of weeks and then by the end of week, FOMC is going out with the core inflation in the US. If you remember, this time Janet Yellen has clearly stated that if the core inflation starts going up again, Fed may start looking to hike the rates again. That would again be a positive dollar negative all other currencies. Global macros are back in focus again.