FIIs may continue to abstain from Indian mkts

New Delhi With the dollar index at 103.5 and the US 10-year bond yield at 4.27 per cent, FIIs are unlikely to pour more money into the Indian market as they did in June and July, says V.K. Vijayakumar, Chief Investment Strategist at Geojit Financial Services.

Rather than looking at index movements, investors may focus on performing sectors like capital goods, automobiles and construction. High quality banking stocks present opportunities for buy on dips, he said.

Global cues for markets continue to be weak. There are two negatives weighing on global stock markets now: One, the US Fed minutes indicate that one more rate hike may be needed in this rate hiking cycle to tame inflation. Two, Chinese macro data indicate that the economy is slowing more-than-feared earlier, and this will impact global economic growth, he added.

In this scenario the Indian market is unlikely to break out to newer highs on a sustained basis and decouple from the rest of the world. However, a sharp correction appears unlikely, he said.

BSE Sensex is down 173 points at 65,366 points in Thursday morning trade. ITC is down 1.7 per cent and Powergrid is down 1.2 per cent.