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There are two broad trends, one negative and the other positive, in the market now. The negative trend is the rising interest rates globally. The Fed’s message that the terminal rate in this rate hiking cycle would be higher than expected earlier is a negative for equity markets. Bond yields (10-year US bond yield is at 4.15%) and the dollar index (112.8) are moving up dragging equity markets down. But even in this unfavourable environment FII flows into India are rising. FIIs have been buyers in the cash market for the sixth straight trading day. This vote of confidence in India is a clear positive. For the near-term the influence of these negative and positive factors will keep the Nifty in a range with no breakouts or breakdowns. However, individual stocks will witness sharp movements responding to the Q2 results. In the present context of high valuations for growth stocks there is value in certain pockets like PSU banks.

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