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Was Tuesday's Market Plunge a Sign of Panic?

The biggest fall of the year so far in U.S. markets – the Dow dropped over 200 points on Tuesday – is nothing compared to losses experienced last year and was probably to be expected, global portfolio manager Mark Tinker of Axa Framlington, told CNBC.

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“We’ve been quite directional, markets have gone up pretty much in a straight line. They’ve broken those short term up trends but they’re now regressing back to a support level.

I don’t think there’s a panic out there but just ‘let’s book a little bit of profit’. Compare that to last year when we were getting minus 3 percent days,” Tinker said.

He added that the characteristics of the market involved some profit taking at the index level but a buying market at the stock level.

“There are clear winners and losers emerging at the stock and sector levels.

I think if you’ve identified stocks that are doing well and managing their businesses well and you get a pull back people will step in and pick them up,” Tinker added.

Tinker said that a clear split had emerged between winners and losers which would continue for the duration of the year.

European markets opened lower Wednesday tracking the overnight losses in Asia as worries over the Greek debt swap deal persisted.

Tuesday’s session had seen the FTSEEurofirst 300 index fall 2.6 percent – its biggest one day fall since last November.

As part of its 130 billion euros ($172 billion) bailout last month, Greece must restructure some 206 billion euros of debt.

The bond swap is expected to wipe off around 100 billion euros in debt from the country but to do this it must have 95 percent participation before the deadline expires Thursday evening.

Tinker added that the Greek question, notably its solvency, was separate to the liquidity issue and the worries the markets had about that, which the Long Term Refinancing Operation (LTRO) – which has been described as Europe’s version of quantitative easing - helped to ease.

However, Marc Ostwald, strategist at Monument Securities, said the LTRO had failed to help businesses.

“If the purpose was to lend onto SMEs and business in the euro area then it is failing. Banks are still hoarding money and banks are making sure they’ve got enough money to pay down debts they have maturing. This is deadlock,” Ostwald told CNBC.

He added that since the start of the year there was a lot of money around with riskier assets being actively sought out.

“Greece is again being used as an excuse for movements in markets.

People have hunted down riskier assets which offer some returns as opposed to no returns you get from government bonds.

People have now just got a case of vertigo,” Ostwald said.