Retail investor exuberance is pushing up the broader market. Investors should not be blinded by the recency bias and chase small caps running away without fundamental support, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.
Inspite of recent underperformance, safety is now in large caps. Since FIIs turned buyers in the cash market on two days recently, they are unlikely to sell big and may again buy on favourable developments, he said.
There is momentum in large-cap IT stocks. The expectation that US will not tip into a sharp recession has improved the prospects for IT. Autos, telecom, capital goods and construction-related segments are likely to remain resilient. Banking stocks bouncing back is only a matter of time, he said.
"The ongoing rally in the mother market US triggered by declining bond yields makes the market construct slightly favourable for the continuation of the rally in India," he added.
BSE Sensex is trading down 25 points at 65,769 points on Monday.
M&M is top loser down more than 2 per cent.
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Ahead of key policy decisions especially from the US Federal Reserve, the Indian stock market closed in red on Tuesday as selling was seen in the PSU bank, auto, IT, financial service, pharma, FMCG, metal, and realty sectors of Nifty.
Buy on dips strategy working well in Indian stock market amid sharp rebound
The surge in the Indian stock market on Friday helped the Indian benchmark indices end the week on a positive note. A strong 2,000-point rebound from the lows suggests that the buy-on-dips strategy is working well in the market, experts said on Saturday.
India’s GDP growth to hold steady in FY25, likely to clock 6.7 pc in FY26
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Sensex closes at 82,133 after 2,000 pts rally from day low
According to the experts, "Currently, the market is anticipating a revival in consumer spending, driven by the festive season and year-end holidays, adding to the sentiments. Additionally, an expectation of an increase in the US spending is propelling the IT sector."