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"Two divergent trends are evident in the market now: one, strength in the global market led by the US and two, weakness in the Indian market. The record setting uptrend in the US market is being driven now by the ‘Trump trade’, expectations of implementation of the promised corporate tax cuts and its positive impact on US corporate earnings. The weakness in the Indian market can be attributed largely to the relentless selling by FIIs which continues this month, too. After the massive FII selling of Rs 113858 crores in October, FIIs have so far, in November, sold equity for Rs 16445 crores in the cash market. The rationale for the FII selling is, the elevated valuations in India which appear conspicuous in the context of the earnings deceleration evident in the Q2 numbers. If the Q3 numbers and leading indicators reflect recovery in earnings, the scenario can change with FIIs reducing selling and even turning buyers. Investors will have to wait and watch for the data. Meanwhile, investors can consider shifting some money from the overvalued mid and smallcaps to quality largecaps. This strategy will turn profitable in the medium to long run."