Market View: Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services

An important trend in the market which has implications for retail investors is the revival of the tug of war between FIIs and DIIs. FPIs have sold equity massively for Rs 20480 crores during the last two days. This is partly in response to the rising bond yields in the US where the 10-year yield has risen to 4.16% and partly due to the high valuation in the Indian stock market. Since the largest chunk of FII AUM is in banks, they have been selling in banks, mainly HDFC bank. Investors should remember that in the tug of war between FIIs and DIIs in recent years, DIIs always won in the medium to long-term even though FII selling can cause short-term pain. FII selling due to external factors has always been opportunities to buy. This time is no different. Mid and small cap segments are strong despite excessive valuations because there is sustained buying and no selling pressure from FIIs. This anomaly will be corrected in due course.