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Quote on Morning market 10 August  2022 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

"The rally in stock markets is not India-specific. Nasdaq has rebounded 19.4% from the June lows and S&P 500 has rebounded 13.3% from the June lows. So, Nifty's rebound of 15.4% from the June lows is in tune with the global trend.

A major positive for India is that FIIs, who were relentless sellers from October 2021 to June 2022, have turned buyers in July and the buying momentum continues in August with net buying of Rs13801 cr till 8th August. FIIs have turned buyers mainly because the dollar has stopped appreciating and started depreciating. (Dollar index has declined from above 109 to 106)

Sensex and Nifty are unlikely  to surpass the previous highs because valuations have become expensive and,  therefore, there will be selling pressure at higher levels. Nifty is now trading at around 20 times FY 23 estimated earnings. High valuation will cap the rally."

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