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Quote On Morning Market 27 February 2023 By Dr. V K Vijayakumar, Chief Investment Strategist at Geojit Financial Services

With FII selling gathering pace (Rs 3466 crores selling in the last 3 days) the market has turned distinctly weak. The global market construct too is unfavourable with sharp cuts in the US last Friday following the 0.6% MoM inflation in the US in January. The rising US bond yields - the 10 year is at 3.93% - and dollar index above 105 now are negative for EM equities. A data which is hugely significant from the Indian market perspective is the declining influence of Indian retail investors. In 2021 and 2022 sustained retail buying helped absorb FII selling and this kept the market resilient. But latest data shows that the number of retail clients are down by 38 lakhs in the last 6 months and the retail/ HNI share in daily volume is down to 44% from the peak of 68 %. This means FII activity will have a disproportionate impact on markets. Since the Indian economy continues to be strong, investors can use weakness in the market to accumulate high quality stocks in banking, capital goods, IT, cement and across sectors.

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