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Even as the holidays are fast approaching, the market is not in a holiday mood -- it is consolidating, but at higher levels, according to V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

The steady rise in the US market which has helped the Dow to set a new record high, is exhibiting the same trend.

The fact that the fear gauge -- VIX -- is at a low level of 12 is an indicator of the underlying strength of the market, he said.

Valuations in the mid and small cap segments are excessive. Chasing mid and small caps at these valuations is risky. Going forward, large-caps are likely to outperform. Even if they don’t, safety is in large caps. Investors should give importance to safety in this time of optimism, he added.

Declining bond yields in the US means FIIs will continue buying Indian stocks. The New Year is likely to witness a fresh bout of FII buying. Large caps like RIL which have not participated much in the rally may see action, he said.

BSE Sensex is up 370 points at 71,807 points on Wednesday. Wipro is up more than 2 per cent.