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Quote On Morning Market 26 May 2023 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

Two major factors - rupee appreciation and decline in US bond yields - that assisted the rally in Indian stock market in early May have reversed. Rupee has depreciated to 82.74 to the dollar and the U.S. 10-year yield has spiked to 3.82%. In spite of this negative development, FII inflows continue and imparts resilience to the market. Both FIIs and DIIs are buyers now, and this is a strong support to the market. Latest data reveals that the twin Balance Sheet  issues - stressed banking system and highly leveraged corporate sector - that plagued the Indian economy and corporate earnings have been addressed. The banking system is now in the pink of health with record profits and low NNPAs. The corporate sector is deleveraged. This turnaround can contribute to good corporate earnings, going forward. Private capex also is picking up. These augur well for the economy and equity markets.

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