Market rebound mostly led by DIIs; betting on BFSI and consumer discretionary stocks: Sunil Subramaniam

Sunil Subramaniam, Market Expert, says that though FIIs have started coming back, the market bounce-back is being led by DIIs as they have been sitting on Rs 2.5 lakh crore cash in the broad market and they are now looking to reverse the trade. Plus the Rs 100,000 crore Budget bonanza via tax cuts would also kick in. Subramaniam says rate sensitives and hence BFSI and consumer discretionary stocks are the right picks at this time. What are you making of this steady climb that the markets have seen? The Nifty alone has recovered about almost 1,000 to 1,200 points from the recent lows?
Sunil Subramaniam: Though FIIs are coming back slowly, I still think it is the DII action which is driving the markets because as I have said before, there is a huge pileup of cash, almost about Rs 2.5 lakh crores with DIIs there and that money is a broad market money. It is not just largecaps, it is large, mid, and small. As the fund houses had generated cash by selling small and midcap stocks, used part of it to buy largecaps and hence the fall in largecaps is not so much, they are essentially now looking at reversing the trade.

As the FIIs come in, they will try to sell the largecaps which have rallied a lot in that period back to the FIIs and re-divert it into mid and small. The only provision is still going to be very stock specific and not even a broad sector call because the earning season only will give a real clarity on the expected EPS growth for next year.
I would say that wherever there is a value there in terms of a sharp