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Below is perspective on market By Mr. S Hariharan, Head Sales Trading, Emkay Global Financial Services on the market

“India has been an outperformer over the last 45 days relative to both EM and DM peers, gaining for cooling inflation expectations as a commodity importer as well as reducing equity risk premia, as a growth market. FII flows over the last 45 days have totalled $1.5 bn, more than double the inflows from domestic institutions. Domestic retail investors have not participated in the recent rally as evidenced in their single stock futures net long position having contracted to $8.5 bn – for perspective, when Nifty was at 18000 in early April, Retail net long in stock futures was at $12 bn.

This suggests that there may still be further room for participation as well as dry powder to cushion any falls caused by global macro factors. Banks, Industrials and Autos have been the leaders and continue to attract incremental flows. While Metals names have seen some short covering, weakening global growth impulses would act as headwind to any meaningful upward revisions to earnings estimates. IT appears most vulnerable in this environment, due to its leverage to US & EU growth.”   

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