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Below the Quote on Morning Market Views from Dr. V K Vijayakumar, Chief Investment Strategist, Geojit Financial Services

"The weakness in the market persists despite the mild recovery witnessed yesterday. The market construct doesn’t favour a rally in the market. FIIs are likely to continue to sell. News flows are not positive. The US market continues to be strong and may attract more capital flows to the US from other markets. A new development is from the Chinese authorities indicating a new perspective regarding the Chinese government’s approach to Chinese businesses. President Xi has indicated the need for a “clean relationship” between government and business. This is regarded as a favourable development for reviving the Chinese economy, which is struggling now from the fall out of the crisis in the real estate sector. If the Chinese government’s new initiatives attract positive responses from the FIIs, that means more bad news for Indian markets. More money will flow into Chinese stocks through the Hang Seng exchange since the PE of the Hang Seng index is only around 12 compared to the 18.5 one-year forward PE in India. Since largecaps are fairly valued in India, calibrated buying in this segment can be done. But the market construct doesn’t favour aggressive buying."

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