Morning view on the market by Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Even when the market is scaling new highs and the undercurrent is positive, there are strong views that the current high valuations cannot be sustained for long. It is important to understand that the DIIs are not bullish about the market at the current elevated valuations. They were sellers in 12 out of the last 13 trading sessions and have cumulatively sold for Rs 16321 crores and may sell more at higher levels. In January and February when the FIIs were selling DIIs were consistent buyers. The 3000 point rally in Nifty from the March lows has given DIIs huge profits and, therefore, profit booking would be a rational response. Selling and profit booking at high levels are easy decisions while buying at high prices can be risky.

The demerger of Jio Financial Services from RIL and the Q1 results of Infosys, HUL and a host of mid-cap IT companies can cause a lot of price action in the market today.